AgencyIntermediateArizona Exam

In Arizona, 'inquiry notice' means that a person is:

ARequired to personally inquire about all recorded documents in the chain of title before they can be deemed to have actual knowledge of any encumbrance affecting the property

BCharged with knowledge of facts they would have discovered by reasonable investigation of visible circumstancesCorrect

CNotified in writing of all title encumbrances by the title company at least 30 days before closing, which satisfies the constructive notice requirement under Arizona law

DLegally obligated to contact the prior owner directly before completing the purchase to inquire about any unrecorded agreements or arrangements affecting the property

Why Charged with knowledge of facts they would have discovered by reasonable investigation of visible circumstances Is Correct

Answer B: Charged with knowledge of facts they would have discovered by reasonable investigation of visible circumstances

Inquiry notice arises when visible circumstances put a reasonable person on notice that further investigation is warranted—such as visible improvements or occupancy suggesting someone else's interest. Failure to investigate after inquiry notice can defeat a good faith purchaser defense.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

Key Agency Terms in This Question

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

People Also Study

Key Terms to Know

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

Abstract of Title

A condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.

Agency

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

Dual Agency

A situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.

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