Question

Which of the following is generally demanded in every sale of real property in California?

Selections

A. A warranty deed

B. An abstract of title

C. A policy of title insurance

D. A trust deed

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Answer: C

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5 Keys Summary

• A policy of title insurance is generally demanded in every sale of real property in California.

• Title insurance acts as a contract of indemnity, protecting against financial losses or damages caused by defects in the past chain of title history.

• Lenders typically require a clear title policy to be in place before they will fund a loan.

• Unlike a trust deed, which is only a security instrument for a loan, title insurance is demanded regardless of whether the property is financed or sold for cash.

• An abstract of title is merely a summary of recorded documents and does not provide the financial protection against title defects that a title insurance policy offers.

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