ALP ALP Real Estate & Property Law 1 — Questions and Answers
Question 1: What legal instrument transfers ownership of real property from a seller to a buyer?
- Deed (Correct answer)
- Mortgage
- Title insurance policy
- Purchase agreement
Correct answer: Deed
A deed is the written instrument that conveys title to real property from the grantor to the grantee.
Question 2: What is 'eminent domain' in U.S. property law?
- The government's power to take private property for public use with just compensation (Correct answer)
- A type of easement granted to utility companies
- A zoning designation for residential districts
- A landlord's right to recover possession from a tenant
Correct answer: The government's power to take private property for public use with just compensation
Eminent domain is the constitutional power of federal, state, and local governments to take private property for public use, conditioned on payment of just compensation.
Question 3: A 'lien' on real property represents:
- A legal claim against the property as security for a debt or obligation (Correct answer)
- Full and unencumbered ownership of the property
- A right of way across the property for a specific purpose
- A long-term lease arrangement
Correct answer: A legal claim against the property as security for a debt or obligation
A lien is a security interest or legal claim attached to real property that must generally be satisfied before the property can be transferred free and clear.
Question 4: What does title insurance protect against in a real estate transaction?
- Financial losses from title defects or ownership disputes discovered after closing (Correct answer)
- Physical damage to the property after purchase
- Failure of either party to close the transaction
- Loss of the real estate agent's commission
Correct answer: Financial losses from title defects or ownership disputes discovered after closing
Title insurance protects buyers and lenders from financial loss due to defects in title such as undiscovered liens, encumbrances, or competing ownership claims.
Question 5: An 'easement' in property law is best described as:
- The right to use another person's land for a specific, defined purpose (Correct answer)
- Complete fee simple ownership of a parcel of land
- A lien securing repayment of a mortgage loan
- A variance from an applicable zoning ordinance
Correct answer: The right to use another person's land for a specific, defined purpose
An easement is a nonpossessory right to use another party's property for a specific purpose, such as access or utility installation.
Question 6: Which type of deed provides a buyer with the greatest level of title protection?
- General warranty deed (Correct answer)
- Quitclaim deed
- Special warranty deed
- Sheriff's deed
Correct answer: General warranty deed
A general warranty deed warrants title against all defects, even those arising before the grantor held the property, providing the most comprehensive buyer protection.
ALP ALP Real Estate & Property Law 1
What legal instrument transfers ownership of real property from a seller to a buyer?