Real Estate Sales Exam Transfer of Title 5

Question 1

A 'lis pendens' filed against a property is intended to provide:

Accepted Answer

Notice that pending litigation affects the property's title

Answer

A lis pendens (Latin for 'suit pending') is recorded to notify prospective buyers and lenders that the title is subject to ongoing litigation.

Question 2

Which of the following instruments transfers title to real property when a borrower defaults and the lender forecloses under a deed of trust?

Accepted Answer

Trustee's deed

Answer

When a trustee sells foreclosed property, they convey title to the successful bidder via a trustee's deed.

Question 3

The government's power to take private property for public use upon payment of just compensation is known as:

Accepted Answer

Eminent domain

Answer

Eminent domain is the inherent power of government to condemn and acquire private property for public use, provided just compensation is paid.

Question 4

If a property owner dies without heirs and without a will, title to the real property passes to the state through a process called:

Accepted Answer

Escheat

Answer

Escheat is the legal process by which property reverts to the state when an owner dies intestate with no identifiable heirs.

Question 5

A title search reveals a 'cloud on title.' This means the property has:

Accepted Answer

An outstanding claim or encumbrance that may affect marketability

Answer

A cloud on title is any document, claim, or encumbrance that appears in the record and casts doubt on the owner's clear title.

Real Estate Sales Exam Practice Test