Escrow & Title

A Mississippi buyer discovers after closing that a neighbor has been using a portion of the purchased property as a driveway for 15 years under a claim of prescriptive easement. This is an example of:

AA defect in title that existed before closing and may be covered by the owner's title insurance policy✓ Correct
BA zoning violation
CA material defect in the physical condition
DAn encumbrance the buyer should have discovered through the mortgage application

Explanation

An existing prescriptive easement claim is a potential title defect or cloud on title. An owner's title insurance policy may cover losses from this type of pre-existing claim, depending on whether it was discoverable by a survey and whether the policy excludes survey matters.

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