Escrow & Title
A Washington title company discovers an old deed from 1945 that was never recorded. This unrecorded deed creates a:
ANo title defect because the deed is too old
BPotential gap in the chain of title that must be investigated✓ Correct
CValid title issue only if the original grantor is still alive
DStandard exception in all title policies
Explanation
Gaps in the chain of title (such as unrecorded deeds) create title defects that must be investigated and resolved. The title company cannot simply ignore an unrecorded deed as it may represent an outstanding claim to the property.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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.
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