84. Paying the listed price and using an FHA-insured loan, a buyer recently bought a house that had been listed and advertised by a real estate firm. Which of the following could cause the buyer to begin a quiet title action?
Answer: D
The buyer may begin a quiet title action due to the failure to obtain a quitclaim deed from the seller's out-of-state relative.
A quiet title action can be initiated by the buyer if there are any claims against the title of the property, such as an ownership interest by a relative of the seller that was not properly addressed.
A) failure by the selling real estate firm to have included the actual down payment in its advertisements of the house
This option is not relevant to the ownership of the property itself. The down payment is a financial aspect of the transaction and does not affect the legal title or ownership rights. Therefore, this failure would not provide a basis for a quiet title action.
B) failure by the lending institution to have informed the buyer of settlement costs at the time of loan application
Similar to Option A, this situation pertains to the financial obligations of the buyer rather than issues of property title. Settlement costs do not impact the legal ownership of the property; thus, this failure would not be a reason for initiating a quiet title action.
C) failure by the seller's agent to have informed the buyer, before the buyer signed the purchase offer, that the seller would have sold the house for 2% less than the listed price
While this could be considered misleading, it does not create a cloud on the title. The price negotiation does not affect the legal claim to ownership of the property, which is what a quiet title action seeks to clarify.
D) failure by the buyer to obtain a quitclaim deed from the seller's out-of-state relative, who claims to hold a small ownership interest in the house
This option directly relates to ownership rights. If the seller's relative has a claim to ownership and the buyer fails to obtain a quitclaim deed to resolve this claim, it creates a potential defect in the title, justifying the need for a quiet title action to establish clear ownership.
Conclusion
The correct answer is D, as it directly addresses the issue of ownership rights and the need to clear any claims on the title. Options A, B, and C focus on financial or procedural matters that do not impact the legal ownership of the property, therefore they do not justify a quiet title action. It is essential for the buyer to secure a clear title, free from claims, to ensure full ownership of the property.