Question 52

Title insurance may be used to protect the interest of a buyer.

Title insurance is primarily designed to protect the financial interests of a buyer in real estate transactions. It provides coverage against potential defects in the title that could affect ownership rights.

A) an optionee.

An optionee, who holds an option to purchase a property, does not have ownership rights until the option is exercised. Therefore, title insurance typically does not protect the interest of an optionee, as their interest is contingent on future actions.

B) a buyer.

A buyer is the correct answer because title insurance is specifically intended to safeguard the buyer's investment in real estate. It protects against risks such as undiscovered liens or claims that could jeopardize the buyer's ownership.

C) a broker.

A broker acts as an intermediary in real estate transactions and does not hold ownership rights or financial interest in the property being bought or sold. Therefore, title insurance is not applicable to the interests of a broker.

D) a tenant.

A tenant leases property but does not have ownership rights to the title. Title insurance does not protect tenants since they do not hold an interest in the property's title, making this option incorrect.

Conclusion

The correct answer is B, as title insurance serves to protect buyers from potential issues with property titles that could affect their ownership. Other options, including an optionee, broker, and tenant, do not have the same ownership interest that necessitates title insurance coverage. Thus, they do not qualify for this protection.