Texas Surveyors Practice Exam

What is the limit of an abstract company's liability?

1. The full value of the property

2. The effect of an omission

3. The recorded chain of title

4. Errors in survey measurements

The correct answer is: The effect of an omission

The limit of an abstract company's liability relates to the effects of omissions in the information they provide regarding a property. An abstract company is responsible for compiling and presenting a comprehensive history of property ownership and interests, including any encumbrances or defects. When an omission occurs—for instance, failing to disclose a lien or an easement—this can directly affect the buyer's understanding and use of the property. In this context, the liability is not unlimited and typically correlates with the specific omissions made by the abstract company. It focuses on how these omissions impact the title's reliability or a buyer's decision-making process rather than the full value of the property itself or errors in survey measurements. Understanding this concept is crucial for both the abstract companies and property stakeholders, as it defines the scope of responsibility in the context of real estate transactions.