Escrow & Title
A Vermont buyer obtains an 'owner's title insurance policy.' This policy primarily protects against:
APhysical damage to the property after closing
BTitle defects and claims existing at or before the policy's effective date (the date of closing)✓ Correct
CFuture zoning changes that reduce the property's value
DEnvironmental contamination claims
Explanation
Owner's title insurance protects the buyer against pre-existing title defects — such as forged deeds, undisclosed liens, missing heirs, or errors in public records — that were not discovered before closing. It does not cover issues arising after the policy's effective date (the closing date).
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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).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
Math Concepts
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