Escrow & TitleIntermediateArizona Exam

The ALTA (American Land Title Association) owner's policy provides coverage for:

APhysical condition of improvements, structural defects, and environmental contamination not disclosed in the public record or visible during a standard property inspection

BSurvey-related issues not shown in public records, in addition to standard title defectsCorrect

CFuture changes in zoning, land use regulations, or governmental restrictions enacted after the policy date that reduce the insured's ability to use the property

DAll matters disclosed in the HOA's governing documents and financial statements, including pending special assessments and litigation against the association

Why Survey-related issues not shown in public records, in addition to standard title defects Is Correct

Answer B: Survey-related issues not shown in public records, in addition to standard title defects

The ALTA extended coverage owner's policy covers additional risks beyond the standard policy, including survey-related issues (boundary disputes, encroachments) and other matters not discoverable from the public record alone.

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.

Key Escrow & Title Terms in This Question

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

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Key Terms to Know

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

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.

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.

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Property Ownership Guide

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