A buyer named Derek is under contract to purchase a beachfront property in Westerly, Rhode Island. His agent informs him that the CRMC has established a 'coastal buffer zone' on the property that restricts construction within a certain distance of the shoreline. Derek asks his agent whether this restriction will appear on the title insurance policy. Which of the following best describes how CRMC coastal buffer zone restrictions typically affect a Rhode Island real estate transaction?
Correct Answer
A) CRMC buffer zone restrictions are regulatory limitations imposed by state law and typically appear as exceptions or exclusions in a standard title insurance policy rather than as encumbrances cleared at closing.
CRMC coastal buffer zone restrictions are governmental regulatory limitations arising from Rhode Island state law and CRMC regulations, not private deed encumbrances. As such, they are typically listed as exceptions or exclusions in a standard title insurance policy — meaning title insurance does not insure against losses arising from these regulatory restrictions. They run with the land and bind all successive owners regardless of whether a new buyer was aware of them. This is a critical distinction for buyers of Rhode Island coastal property: title insurance will not protect them if they violate CRMC regulations, because those are matters of public record and governmental regulation outside the scope of standard title coverage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
More Practice Of Real Estate Questions
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