A California court enters a quiet title judgment declaring that Smith is the rightful owner of a disputed parcel. Smith then sells the property to Jones via grant deed, and Jones obtains an ALTA extended title insurance policy. Subsequently, a third party produces a deed predating Smith's chain of title, claiming that the quiet title action had a jurisdictional defect because proper service was not made. Under California law, which of the following BEST describes Jones's position?
Correct Answer
A) Jones may lose title if the jurisdictional defect voids the quiet title judgment, but the ALTA policy should cover the loss
A quiet title judgment with a jurisdictional defect (such as improper service of process) can potentially be set aside. If the judgment is voided, Jones could lose title to the rightful claimant. However, Jones's ALTA extended title insurance policy would cover this loss because it protects against defects in the title, including those arising from defective judicial proceedings that appear in the chain of title.
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Previous Question
Henry is selling his home in Marin County, California. The buyer's title company issues a preliminary title report showing an old deed of trust that Henry already paid off seven years ago. Henry contacts his former lender, but the company has gone out of business. How can Henry clear this title defect in California?
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In a California transaction, the escrow officer prepares the grant deed for the seller's signature. The seller asks whether the deed must be notarized. The escrow officer correctly explains that: