Question 15

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

Title insurance is primarily designed to protect the interests of a buyer in real estate transactions. It provides coverage against potential issues related to the title of the property, ensuring that the buyer's investment is safeguarded against unforeseen claims or defects.

A) an optionee

An optionee is a party that has the right to purchase property under a contractual agreement but does not hold legal title to it. Title insurance does not typically protect optionees since they have not yet completed the purchase and thus do not have a vested interest in the title.

B) a buyer

As the correct answer, a buyer is the primary beneficiary of title insurance. The policy protects the buyer from losses due to defects in the title, ensuring that they have clear ownership of the property after the purchase.

C) a broker

A broker facilitates the transaction between buyers and sellers but does not have a direct interest in the title of the property being sold. Title insurance is not meant to protect brokers, as they operate on a commission basis rather than holding ownership rights.

D) a tenant

A tenant does not own the property and, therefore, is not covered by title insurance. Their rights and interests are typically protected under lease agreements rather than title policies, which are intended for property owners.

Conclusion

The correct answer is B, as title insurance is specifically designed to protect the interests of buyers in real estate transactions by covering potential risks related to the property's title. The other options—optionee, broker, and tenant—do not hold ownership rights and thus do not benefit from title insurance in the same way that a buyer does.