Chapter 1 - MCQ (48)

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Questions and Answers

What is a primary duty of a title agent under Florida law?

Negotiating prices between buyers and sellers

Obtaining approval from judges for title issues

Evaluating the title search for insurability (correct)

Conducting legal representation for clients

What is prohibited for non-attorney title agents in Florida?

Assisting clients in real estate transactions

Collecting premiums for title insurance policies

Conducting title searches and evaluations

Engaging in the unauthorized practice of law (correct)

Which of the following is NOT included in the primary title services defined by law?

Drafting legal documents for the closing (correct)

Collecting premiums for policies

Performing title searches

Issuing title commitments

Why is it important for title agents to know about ethical duties?

To prevent unauthorized legal practices Signup and view all the answers

What action must a title agent take before issuing a title policy?

Evaluate exceptions in the title commitment Signup and view all the answers

In the context of title insurance, what constitutes inappropriate actions by a non-attorney title agent?

Interpreting legal terms in the contract Signup and view all the answers

What is a non-attorney title agent forbidden from doing during a real estate transaction?

Providing legal advice on contract disputes Signup and view all the answers

What is a key characteristic of the duties under the contract for title agents?

They are defined by Florida statutes and case law Signup and view all the answers

What does sound underwriting practices primarily involve?

Following state law and underwriter guidelines Signup and view all the answers

What is essential for determining insurability?

Understanding the covered risks and exclusions Signup and view all the answers

What should be confirmed before closing a commitment policy?

All underwriting objections and requirements will be met Signup and view all the answers

What is a duty outlined in the agency agreement between an agency and the underwriter?

To determine insurability Signup and view all the answers

Which document should be reviewed to identify exceptional conditions?

Schedule B2 of the commitment Signup and view all the answers

What task may be necessary if a right of first refusal is discovered in covenants, conditions, and restrictions?

Releasing the right of first refusal Signup and view all the answers

What practice should be avoided to prevent unauthorized practice of law?

Giving legal advice on insuring provisions Signup and view all the answers

What type of report should be provided to the surveyor for locatable title matters?

Copies of title matters listed in Schedule B2 Signup and view all the answers

What types of documents can a non-attorney agent in Florida prepare?

Mortgages and deeds Signup and view all the answers

What is a situation where preparing a legal document would be considered unauthorized practice of law?

Preparing a deed for a friend on property not being insured Signup and view all the answers

Which of these documents should be referred to an attorney for preparation?

Wills Signup and view all the answers

What could happen if a non-attorney agent prepares complicated documents?

They could face liabilities for mistakes Signup and view all the answers

Which of the following documents is considered too complex for a non-attorney agent to prepare?

Wraparound mortgages Signup and view all the answers

What is a primary reason certain documents should not be prepared by non-attorney agents?

They require specialized legal expertise Signup and view all the answers

What must a non-attorney do before preparing legal documents related to real estate?

Issue a title policy Signup and view all the answers

What can signify the unauthorized practice of law when preparing documents?

Creating documents for non-insured properties Signup and view all the answers

What is a primary concern related to uninsured deeds in the chain of title?

They have a higher possibility of fraud or mistakes. Signup and view all the answers

Which of the following best describes a quitclaim deed?

It transfers title without warranties. Signup and view all the answers

What is one recommended action when dealing with a potential title issue?

Discuss the issue with a colleague before proceeding. Signup and view all the answers

What should be done if there are changes to the parties involved before closing?

The contract should be amended to include these changes. Signup and view all the answers

What is a potential consequence of not preparing documents according to the contract or lender's instructions?

Increased exposure to liability. Signup and view all the answers

Why should a non-attorney avoid advising on how to hold title?

It may lead to misunderstandings and potential liability. Signup and view all the answers

What is a typical characteristic of uninsured transfers?

They are typically executed through a quitclaim deed. Signup and view all the answers

Why should you be skeptical about documents signed outside of your closing?

They may have defects or forgeries. Signup and view all the answers

What can a fraudster do if proper steps are not taken in title transactions?

Easily transfer title without resistance. Signup and view all the answers

What is a significant risk associated with unrecorded deeds?

They may have been executed in error. Signup and view all the answers

What should you do if a deed executed by a grantor before death is delivered after their death?

Investigate to ensure proper delivery occurred. Signup and view all the answers

What is the primary determining factor regarding the legal matter of delivery of a deed?

The intent of the grantor. Signup and view all the answers

In the case of a previous power of attorney that doesn't meet underwriting requirements, what must happen?

The principal must sign the revised POA. Signup and view all the answers

What does title insurance specifically cover?

Defects and encumbrances on the title. Signup and view all the answers

What is the recommended action when faced with a question about the delivery of a deed?

Consult the underwriting department for assistance. Signup and view all the answers

What is a 'deed from the grave' primarily concerned with?

Deeds executed before death but recorded after. Signup and view all the answers

What must happen if a lender only wants one party named as a borrower when two parties are in title?

Both parties must sign as borrowers on the mortgage. Signup and view all the answers

Why is it important to document how the title is held?

To prevent potential underwriting issues or conflicts. Signup and view all the answers

What should you do if a customer does not understand how to hold title?

Refer them to an attorney. Signup and view all the answers

What may happen if you go beyond the allowable actions in a title transaction?

You could open yourself and your agency up to liability. Signup and view all the answers

What does the co-ownership interest reference chart provide to customers?

Informational resources about ownership structures. Signup and view all the answers

What must accompany a change in title to ensure it aligns with loan requirements?

An amendment to the contract. Signup and view all the answers

What is the primary risk associated with not documenting the title agreement properly?

Potential for lawsuits over misunderstandings. Signup and view all the answers

Which of the following best describes the purpose of the provided reference chart?

It provides general information about co-ownership. Signup and view all the answers

Study Notes

Title and Closing Process for Non-Attorneys

Florida law outlines ethical duties for non-attorney title and closing agents in real estate transactions.
Agents must understand the difference between authorized and prohibited actions.
Key duties include determining insurability and appropriate exceptions for title insurance policies.
Sound underwriting practices, including state law and underwriter guidelines, are crucial for evaluating title risk.
Non-attorney agents should not explain insuring provisions or legal implications of coverage.
Agents must prepare title commitments, and issue them after reviewing deed and exceptions in Schedule B2.
Documents must be reviewed for insurability and confirm that all requirements are met before closing.
Reviewing and preparing documents in the chain of title, such as deeds, mortgages, and satisfactions, requires careful consideration.
Avoid preparing documents like wills, trust agreements and powers of attorney, which are the responsibility of attorneys.
Do not prepare legal documents without issuing a policy.
Avoid providing legal advice to clients on how to hold title.

Unauthorized Practice of Law

Preparing legal documents, like wills, trust agreements, and powers of attorney is prohibited for non-attorneys.
Providing legal advice concerning holding title (e.g., how a couple holds title) is the unauthorized practice of law.
Agents should not prepare deeds, mortgages or other documents for properties not insured.
Avoiding preparing documents outside of closing procedures, such as accepting deeds executed outside the closing.
Documents that contain errors or defects should be declined.
Documents from prior transactions may need to be examined for potential issues such as forgeries and intent of the individual involved.
Non-attorneys may handle documents relating to title insurance, and issuance of commitment, as these are essential for insurability.

Title Documents

Title agents should scrutinize carefully and confirm delivery occurred before grantor's death.
Title searches and title commitment review should reveal any uninsured deeds in the chain of title, potentially exposing the possibility of errors or fraud.
Any changes or additions to the title should be reflected in writing to avoid conflicts or misunderstandings.
Advise customers to consult an attorney or tax advisor regarding relevant legal issues
Clarify the fact that informational charts or summaries provided are not legal advice, and further assistance is needed from a professional such as an attorney.

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Description

Test your knowledge about the roles and responsibilities of title agents under Florida law. This quiz covers ethical duties, permissible actions, and essential practices for title agents in real estate transactions. Ensure you understand the legal framework guiding title insurance practices in Florida.