Question 15

Standard title insurance would protect a buyer when the seller has forged an ex-partner's signature on the deed.

Title insurance is designed to protect buyers from defects in title, including issues arising from fraudulent activities, such as forgery. In this case, if the seller forged an ex-partner's signature, the title is not valid, and the title insurance would provide protection against this risk.

A) when the seller has forged an ex-partner's signature on the deed

This option is correct because standard title insurance covers instances of fraud, including forgery. If a signature is forged, it compromises the legitimacy of the deed, and the title insurance would protect the buyer from any claims or issues that arise from this fraudulent act.

B) if after closing, the HOA placed a lien on the property for the previous owners' unpaid dues

This option is incorrect because standard title insurance typically does not cover liens that arise after the closing of the sale. Liens from homeowners’ associations (HOAs) are usually considered ongoing obligations of the property that the buyer assumes at closing, unless specifically noted in the title insurance policy.

C) in a purchase where the buyer had knowledge of a shed violating setback requirements

This option is incorrect as well because title insurance does not protect against issues that the buyer was aware of prior to the purchase. If the buyer knew about the violation, they cannot claim protection under title insurance for an issue they were already aware of.

D) for the purchase of a property bought sight unseen when the buyer discovers a tenant living at the property

This option is also incorrect because title insurance does not cover issues related to the physical possession of the property, such as tenant rights or occupancy. The buyer assumes the risks associated with purchasing a property without viewing it, and title insurance would not address these concerns.

Conclusion

The correct answer is A, as title insurance is specifically designed to address issues related to the validity of ownership and can protect against fraudulent actions like forgery. Options B, C, and D do not align with the protections offered by standard title insurance, as they pertain to situations that are either ongoing obligations or known issues at the time of purchase.