Real Estate Council of Alberta Fundamentals Practice Exam

What compensation is provided by the land title assurance fund?

1. Compensation for property sales

2. Compensation due to an error on title

3. Compensation for rent losses

4. Compensation for physical property damage

The correct answer is: Compensation due to an error on title

The land title assurance fund provides compensation specifically for losses incurred due to errors on the title. This means that if an individual suffers a financial loss because of a mistake related to the property title—such as an incorrect legal description, fraud, or other defects that affect ownership rights—this fund is designed to offer restitution. Errors on title can lead to significant issues for property owners, including loss of ownership or challenges in selling the property. The assurance fund acts as a safety net to protect individuals from the financial repercussions of such errors, ensuring that property rights are upheld and providing a mechanism for recourse when mistakes occur in the real estate transaction process. The other options, such as compensation for property sales, rent losses, or physical property damage, do not fall under the purview of the land title assurance fund. Each of these scenarios addresses different aspects of property ownership and management, but the focus of the assurance fund is specifically on inaccuracies or issues related to title documents.