Escrow & Title
A Pennsylvania title company that discovers an undisclosed heir who may claim a deceased seller's property should:
AClose the transaction and obtain title insurance to cover the potential claim
BRequire the estate to locate and resolve the heir's potential claim before closing✓ Correct
CAsk PREC to confirm the seller's authority to convey
DRecord the deed immediately to cut off the heir's claim
Explanation
An undisclosed heir with a potential ownership claim is a title defect that must be resolved before closing. The estate must either obtain a proper deed from the heir (or evidence of their waiver), complete formal probate proceedings, or obtain an indemnification.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Chain of TitleThe 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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