Real Estate Updated Maryland-Real-Estate-Salesperson Exam Questions and Answers by gus

An owner’s (buyer’s) title insurance policy provides financial protection to the buyer after closing against covered defects in title (e.g., undisclosed liens, errors in the public record, forgeries) that existed as of the policy date. An abstract of title and a chain of title are historical summaries used in the examination of title but do not provide indemnity. An attorney’s opinion of title is an expert assessment, not an insurance contract, and similarly does not indemnify the buyer against losses from covered defects discovered later.

The Statute of Frauds requires that certain contracts—including those for the sale or transfer of real property—be in writing and include:

The names of the parties,

Identification of the property, and

The essential terms and conditions (such as price and contingencies).This ensures the agreement is legally enforceable in court.

In the closing/title section of the pre-licensing course, learners are taught that a title policy contains Schedules—most notably Schedule A (coverage basics) and Schedule B (exceptions). Schedule B—Exceptions lists specific matters found of record prior to the policy’s effective date (e.g., recorded easements, covenants, restrictions, prior-of-record liens, and taxes/assessments) that are excluded from coverage unless affirmatively insured over or removed.

While policies also include standard exceptions (which can address certain unrecorded matters), the items “generally” shown on the schedule of exceptions are the recorded encumbrances discovered in the title search that predate the policy.