Escrow & Title
A title insurance policy exception for 'taxes and assessments not yet due and payable' means the policy:
ACovers all future property tax assessments
BDoes not cover future property tax liens that arise after the policy is issued✓ Correct
CProtects the buyer from special assessment districts
DCovers school levies and bond measures
Explanation
Title insurance policies typically except future property taxes and assessments not yet due and payable at closing. The policy covers matters that existed before the effective date, not future obligations the owner will incur.
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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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
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