Escrow & Title
After closing, a Washington buyer discovers the title company missed a recorded easement that significantly impacts the property's use. Under the owner's title insurance policy, the buyer:
AMust sue the prior owner for failing to disclose the easement
BCan file a title insurance claim for the loss caused by the missed easement✓ Correct
CHas no remedy because easements are public record
DMust accept the easement because they received a deed
Explanation
Owner's title insurance protects against losses from defects in title existing before the policy date that were not discovered during the title search. A missed recorded easement is exactly the type of defect title insurance is designed to cover.
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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).
EasementA non-possessory right to use another person's land for a specific purpose.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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