PSI Oklahoma Real Estate Practice Test

What does the abstract and opinion method of assuring title primarily protect against?

1. Encroachments by adjoining property owners

2. Defects of record

3. Unrecorded mechanic's liens

4. Claims of unrecorded land contracts

The correct answer is: Defects of record

The abstract and opinion method of assuring title primarily serves to protect against defects of record. This method involves the preparation of an abstract of title, which is a comprehensive summary of the legal status of the property based on public records. It lists all documents affecting the title, such as deeds, mortgages, and court judgments. When an attorney provides an opinion based on this abstract, they analyze the documented history to identify any potential issues or defects that could affect the ownership of the property. These defects of record may include prior liens, encumbrances, or other claims that are documented within the public records and could pose risks to the current property owner’s title. The emphasis here is on 'defects of record,' meaning that issues documented in public records are closely monitored and assessed through this method. By ensuring that these records are clear and acceptable, the method aids in providing a level of assurance that the title is indeed good and marketable. It does not primarily address issues such as encroachments or unrecorded claims, which are often outside the scope of what the abstract and opinion method can effectively safeguard against.