Rhode Island Escrow & Title
Practice Questions & Answers (2026)

Explanation

Closing (settlement) is the final step in a real estate transaction where the buyer and seller sign all necessary documents, the buyer pays the purchase price, funds are disbursed, and the deed is recorded to officially transfer ownership.

Explanation

Recording a deed in the local land records provides constructive notice — legal notice to the world — of the ownership transfer. This protects the buyer against subsequent claims by third parties who might later claim an interest in the property.

Explanation

A special (limited) warranty deed warrants title only against defects that arose during the grantor's period of ownership — not against defects that existed before the grantor acquired the property. This offers less protection than a general warranty deed.

Explanation

An impound account (also called an escrow or reserve account) is maintained by the lender to collect monthly amounts for property taxes and insurance. The lender pays these bills when they come due, ensuring the property remains properly insured and taxes are current.

Explanation

A title search (abstract of title) examines the chain of title — all recorded instruments affecting the property — going back a specified number of years (often 50 years or more) to verify ownership history, identify encumbrances, and ensure marketable title.

Explanation

Rhode Island is an attorney-closing state. While not legally mandated in every case, it is customary and standard practice for a licensed Rhode Island attorney to conduct the closing, review documents, and conduct the title examination.

Explanation

An owner's title insurance policy protects the buyer against title defects, liens, or encumbrances that existed prior to or at the time of purchase but were not discovered during the title search. It is a one-time premium paid at closing.

Explanation

A lender's title insurance policy protects the mortgage lender's interest in the property up to the outstanding loan balance. Most lenders require this policy as a condition of the mortgage loan. It does not protect the buyer's equity.

Explanation

RESPA (Real Estate Settlement Procedures Act) prohibits kickbacks and unearned fees — including referral fees between settlement service providers, such as a broker receiving payment from a title company solely for referring business.

Explanation

A title commitment (or title binder) describes the conditions — such as payoff of existing liens, execution of required documents, and payment of premiums — that must be satisfied before the title company will issue a final title insurance policy.