CHCP CHCP Lien & Encumbrance Resolution 3

Question 1

An easement appurtenant differs from an easement in gross in that an easement appurtenant:

Accepted Answer

Benefits a specific adjacent parcel of land and transfers with it

Answer

An easement appurtenant is tied to the ownership of a benefiting parcel (dominant estate) and automatically transfers when that land is sold, unlike an easement in gross which belongs to a person or entity.

Question 2

A deed restriction that limits a property to residential use only is an example of which type of encumbrance?

Accepted Answer

Covenant or deed restriction

Answer

Covenants, conditions, and restrictions (CC&Rs) are private deed-based limitations on land use that run with the land and bind future owners.

Question 3

Before closing, a title examiner discovers that a neighbor's fence encroaches two feet onto the seller's property. This is categorized as which type of encumbrance?

Accepted Answer

Encroachment

Answer

An encroachment occurs when a structure from one property illegally extends onto an adjoining property, potentially clouding title or creating a boundary dispute.

Question 4

A title company issues an 'insure over' decision when it agrees to:

Accepted Answer

Provide coverage for a specific title defect or lien that cannot be immediately resolved

Answer

Insuring over means the title insurer agrees to accept the risk of a known defect or lien and provide coverage for potential losses arising from it, rather than requiring full resolution before closing.

Question 5

Which process allows a title company to step into the shoes of an insured who has paid a loss in order to pursue recovery from the responsible party?

Accepted Answer

Subrogation

Answer

Subrogation gives the title insurer the legal right to recover funds from a third party responsible for the loss after the insurer has compensated the insured.

(CHCP) Certified Home Closing Professional Practice Test

(CHCP) Certified Home Closing Professional Practice Test

CHCP CHCP Lien & Encumbrance Resolution 3