Escrow & TitleIntermediateDelaware Exam

What is 'gap coverage' in Delaware title insurance?

ACoverage for the period between the last title search and the recording of the deed — protecting against liens or claims arising in that windowCorrect

BCoverage for gaps in the chain of title going back more than 60 years

CCoverage for differences between the appraised value and purchase price

DCoverage for gap periods when a property is vacant between owners

Why Coverage for the period between the last title search and the recording of the deed — protecting against liens or claims arising in that window Is Correct

Answer A: Coverage for the period between the last title search and the recording of the deed — protecting against liens or claims arising in that window

Gap coverage in title insurance protects against defects, liens, or encumbrances that arise in the 'gap' period between the last title search and the actual recording of the deed. In Delaware, the gap period can be a day or more — during which time new liens or claims could be filed.

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.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

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.

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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.

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.

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.

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