Escrow & TitleIntermediateAlabama Exam

An Alabama title search covering the last 40 years is considered adequate under what legal concept?

AMarketable title standard

BThe Marketable Title Act, which limits the search period needed for clear titleCorrect

CCERCLA clean site provisions, though outcomes can differ depending on circumstances

DRESPA title requirements

Why The Marketable Title Act, which limits the search period needed for clear title Is Correct

Answer B: The Marketable Title Act, which limits the search period needed for clear title

Many states, including Alabama, have Marketable Title Acts that establish a search period (often 40 years) after which certain old claims and interests are extinguished if not re-recorded.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

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Key Terms to Know

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Easement

A non-possessory right to use another person's land for a specific purpose.