NY Real Estate Deeds and Title Practice Questions

Correct answer: D — Quitclaim deed

A quitclaim deed conveys only whatever interest the grantor has, with zero warranties. Banks selling foreclosed properties routinely use quitclaim deeds because they cannot make warranties about a property's title history before they acquired it. The buyer takes whatever title the bank has, with no protection if title defects are later discovered.

Correct answer: B — The buyer's owner's title policy

The lender's title policy protects the lender's mortgage interest, not the buyer. For the buyer to be protected, they must have their own owner's title policy. A mechanic's lien that existed before the policy date is exactly the type of title defect owner's title insurance is designed to cover. The lender's policy only protects up to the loan amount and only benefits the lender.

Correct answer: B — Buyer B. They recorded first and had no notice of the prior conveyance

Under New York's race-notice recording system, a subsequent purchaser who (1) pays valuable consideration, (2) has no actual or constructive notice of the prior unrecorded deed, and (3) records first, prevails over the prior unrecorded grantee. Buyer B meets all three requirements. This outcome, while harsh to Buyer A, is the purpose of the recording system. It punishes those who fail to record.