Real Estate Council of Alberta Fundamentals Practice Exam

What is estoppel insurance primarily concerned with?

1. Property value

2. Financial status

3. Property maintenance

4. Investment opportunities

The correct answer is: Financial status

Estoppel insurance primarily focuses on financial status, particularly in the context of real estate transactions. This type of insurance serves as a safeguard for buyers and lenders by verifying the financial standing of all parties involved in a property deal. It ensures that there are no undisclosed liens, claims, or other financial obligations that could affect ownership rights or the value of the property. When a property is bought or financed, estoppel insurance helps to confirm that the seller has disclosed all relevant financial information and that there are no hidden financial pitfalls that might arise after the transaction is completed. By providing this assurance, estoppel insurance mitigates risks associated with financial liabilities that could lead to disputes or loss of investment. Other options such as property value, property maintenance, and investment opportunities, while important aspects of real estate transactions, do not directly relate to the primary focus of estoppel insurance. Instead, they pertain to broader market conditions, property upkeep, and potential financial returns rather than the specific assurance of financial transparency provided by estoppel insurance.