Escrow & TitleIntermediateCalifornia Exam

What is a 'grant deed' and what implied warranties does it contain?

AA deed used only in foreclosures with no warranties, under standard California escrow and title practice, consistent with customary closing procedure

BA deed used in California that implies the grantor has not previously transferred the property and has not encumbered it (other than disclosed encumbrances)Correct

CA deed that guarantees title against all defects, present and past, as typically handled by an escrow officer, under standard California escrow and title practice, consistent with customary closing procedure

DA deed used only by government entities, consistent with standard title insurance practice, under standard California escrow and title practice, consistent with customary closing procedure

Why A deed used in California that implies the grantor has not previously transferred the property and has not encumbered it (other than disclosed encumbrances) Is Correct

Answer B: A deed used in California that implies the grantor has not previously transferred the property and has not encumbered it (other than disclosed encumbrances)

A grant deed is the most common deed used in California. It contains two implied warranties: (1) the grantor has not previously transferred the property to another, and (2) the property is free from undisclosed encumbrances made by the grantor.

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

Deed

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

Encumbrance

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

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.

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

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Key Terms to Know

Deed

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

Encumbrance

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

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.

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