Chapter 1-MCQ-v2
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Questions and Answers

What must title agents do to ensure appropriate coverage when issuing a policy?

  • Advise on contract terms
  • Prepare legal documents for the transaction
  • Evaluate the title search using sound underwriting practices (correct)
  • Engage in negotiations between parties

    • What risks do non-attorney title agents face regarding their legal duties?

  • They may risk unauthorized practice of law (correct)
  • They can negotiate contract terms freely
  • They can hire attorneys to manage legal tasks
  • They have no legal duties as title agents

    • Which task differentiates a closing agent's duties from those of a title agent?

  • Performing the title search
  • Issuing the title commitment
  • Conducting the closing process (correct)
  • Charging and collecting the title premium

    • Why is it essential for non-attorney title agents to understand their ethical duties?

    <p>To ensure compliance with Florida statutes and prevent legal issues (C)</p> Signup and view all the answers

    Which of the following documents can a non-attorney agent in Florida prepare?

    <p>Deeds for property transfers (B)</p> Signup and view all the answers

    What is one of the actions a non-attorney must avoid when preparing legal documents?

    <p>Drafting curative documents without a title policy (C)</p> Signup and view all the answers

    When can a non-attorney agent prepare documents affecting title in Florida?

    <p>Only when a title policy is issued (A)</p> Signup and view all the answers

    What is a crucial aspect of sound underwriting practices?

    <p>Following state law and underwriter's guidelines (D)</p> Signup and view all the answers

    What must a title agent have a working knowledge of to determine insurability?

    <p>The insuring provisions including covered risks and exclusions (B)</p> Signup and view all the answers

    What is one of the responsibilities when preparing and issuing the commitment policy?

    <p>Reviewing the deed and requirements in Schedule B1 (D)</p> Signup and view all the answers

    What should be avoided to not violate the prohibition against unauthorized practice of law?

    <p>Discussing the implications of covenants, conditions, and restrictions (A)</p> Signup and view all the answers

    Flashcards

    Determining Insurability

    The process of evaluating an applicant's risk to determine if they qualify for insurance.

    Sound Underwriting Practices

    The principles and practices used to assess and manage risk in providing insurance coverage.

    Insuring Provisions

    The terms and conditions outlining the covered risks and excluded risks in an insurance policy.

    Underwriting Objections and Requirements

    Objections or requirements identified during the underwriting process that need to be resolved before issuing a title insurance policy.

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    Unauthorized Practice of Law

    Prohibition against unlicensed individuals providing legal advice, typically restricted to licensed attorneys.

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    Title Search Evaluation

    The process of examining a property's title history to determine if there are any issues that could prevent a clear title from being issued.

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    Exceptions in Title Insurance

    Specific provisions within an insurance policy that exclude certain risks or liabilities from coverage.

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    Issuing a Title Commitment

    The process of issuing a formal document that outlines the coverage and terms of a title insurance policy.

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    Charging and Collecting Premiums

    The process of collecting the premium from the buyer or borrower to cover the cost of title insurance.

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    What documents can non-attorney agents prepare in Florida?

    A non-attorney agent in Florida is permitted to prepare some documents related to title insurance, such as deeds, mortgages, and satisfactions. These actions are deemed essential for determining insurability and are allowed because they directly affect the title to be insured.

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    Which documents should be prepared by an attorney?

    A non-attorney agent in Florida cannot prepare documents like wills, trust agreements, durable powers of attorney, or documents that create a lien. These require specialized legal knowledge and expertise.

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    Can non-attorney agents prepare documents outside of title insurance matters?

    Non-attorney agents are prohibited from preparing legal documents unless a title insurance policy is being issued, even for close friends or clients. This is to ensure that legal documents are prepared by qualified professionals.

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    What are some documents non-attorney agents should avoid in Florida?

    It's generally unsafe for Florida non-attorney agents to prepare complex documents like wraparound mortgages or deeds with certain types of life estates. The legal complexities and potential for liability associated with these documents demand the expertise of an attorney.

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    What is the general rule for non-attorney agents in Florida regarding document preparation?

    Non-attorney agents should generally avoid preparing documents that are not directly related to the issuance of a title policy. This helps ensure that all legal documents are prepared by the proper qualified individuals.

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    Study Notes

    Title and Closing Process for Non-Attorneys

    • Do's and Don'ts: Florida law dictates ethical duties for non-attorney title and closing agents in real estate transactions.
    • Primary Title Services: These are required for issuing title commitments and policies. They involve title search evaluation for insurability, using sound underwriting practices and policies to establish appropriate coverage and exceptions.
    • Insurability Determination: Involves understanding covered risks and exclusions to ensure proper coverage for the consumer, non-attorneys should not explain the meaning of the provisions.
    • Commitment and Policy Preparation: Review deed, Schedule B1 requirements, and Schedule B2 exceptions to confirm all commitments are met.
    • Unauthorized Practice of Law: Non-attorneys cannot provide legal advice or prepare legal documents such as deeds, wills, trust agreements, or durable powers of attorney.

    Avoiding Unauthorized Practice of Law

    • General Principle: Preparing documents affecting title transfers are permissible, but not for other legal documents.
    • Documents Requiring Attorneys: Deeds, mortgages, satisfactions, wills, trust agreements, durable powers of attorney and other documents related to creating legal rights or obligations require an attorney.
    • Legal Documents: Preparing legal documents without an issued policy is against the law. Curative documents to clear up clouds on property are usually considered an unauthorized practice of law.
    • Complex Documents: Avoid preparing complicated documents like wraparound mortgages or deeds reserving enhanced life estates.
    • External Documents: Decline requests to accept documents outside of closing.

    Title Issues and Considerations

    • Uninsured Deeds: Be aware of uninsured deeds in the chain of title; they raise heightened risk of mistakes or fraud and lack warranties.
    • Pre-Death Deeds: Avoid using deeds executed by someone deceased or relying on a previously executed power of attorney without proper verification of its validity and compliance with the signing process.
    • Requirements In The Chain of Title: Be cautious of any documents that are questionable or incomplete within a chain of title.
    • Title Holder Issues : Non-attorneys should not advise customers on the way to hold title — that is reserved to attorneys.
    • Customer Clarification Requests : Remain mindful of customer clarification requests, understanding whether a customer seeks additional information or advice, and redirecting them to other resources if needed.

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    Related Documents

    Florida Title & Closing Do's & Don'ts PDF

    Description

    This quiz explores the ethical duties and primary services required of non-attorney title and closing agents in Florida real estate transactions. It covers insurability determinations, commitment and policy preparation, and the boundaries of unauthorized legal practice. Knowledge of these aspects is crucial for compliance and effective practice in this field.

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