Escrow & Title
A Connecticut title insurance company discovers after closing that a property has an access easement that was not shown in the title search. The owner's policy will:
ANot cover it since it was not found before closing
BCover the easement since it was a pre-policy defect that the search failed to discover✓ Correct
CCover only the legal fees to address the easement, not actual damages
DRequire the owner to pay a deductible
Explanation
Title insurance protects against pre-closing title defects that were not discovered in the title search. An easement that existed before the policy was issued but was not found is exactly the type of defect title insurance is designed to cover.
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Key Terms to Know
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.
EasementA non-possessory right to use another person's land for a specific purpose.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Math Concepts
State-Specific Concepts
DRE Regulation
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