Diana discovers that the seller of her California home forged a deed from the previous owner to himself before selling to her. Diana's CLTA title insurance policy was issued at the time of her purchase. Even though Diana acted in good faith, the true owner demands return of the property. Under California law, which statement is MOST accurate?
Correct Answer
B) The true owner can reclaim the property because a forged deed is void and passes no title, but Diana's title insurance will compensate her for the loss
Under California law, a forged deed is void ab initio (from the beginning) and cannot pass title, even to a bona fide purchaser. Unlike a voidable deed (fraud, undue influence), a void deed passes nothing. However, Diana's CLTA title insurance policy covers losses from forgery, so the title company will compensate her up to the policy amount for her loss.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Transfer Of Property Question
Background Knowledge for Transfer Of Property
Real World Application in Transfer Of Property
Common Mistakes to Avoid on Transfer Of Property Questions
Related Topics & Key Terms
Key Terms:
More Transfer Of Property Questions
Determining who pays what at closing involves:
Closing is always the _____ step in real estate transactions.
Depreciation on rental property for federal tax purposes is calculated over:
A title company examines the public records and finds that all deeds in the property's history are properly recorded and connect in an unbroken sequence. This unbroken sequence of ownership is called the
In a jurisdiction where a later purchaser must both lack notice and record before the earlier claimant records, what kind of recording act applies?
- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
- → On a settlement statement, the buyer's earnest money reduces the remaining cash needed to close. How is that item characterized?
- → On a settlement statement, an item increases the buyer's amount due at closing. How is that item characterized?
- → On the seller's settlement statement, the purchase price of $400,000 appears as what?
- → At closing, the purchase price of $350,000 appears on the buyer's side of the settlement statement. Is this amount a debit or a credit to the buyer?
- → Under TRID rules, the lender must deliver the Closing Disclosure to the borrower at least how many business days before loan consummation?
- → In an escrow closing, the escrow agent discovers that the seller has not yet provided the signed deed. What should the escrow agent do?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Previous Question
A California real estate licensee is preparing for a closing. The buyer asks what happens if the seller cannot deliver clear title on the closing date. Under typical California purchase agreements, what remedy does the buyer have?
Next Question
A California preliminary title report is issued in connection with a residential sale. Which of the following items would MOST likely appear as a standard exception in that report?