Define: Marketable Title

A marketable title refers to a property title that is free from defects and encumbrances, allowing the owner to convey the property to a buyer without risk of legal challenges or claims by third parties.

Some examples of defects in title are unresolved liens, easements, encroachments, boundary disputes, unpaid taxes, undisclosed heirs, forged documents, and undisclosed restrictions or covenants.

Having a marketable title is essential when buying or selling real estate because it ensures that the buyer receives clear ownership of the property, free from any legal issues or claims that could affect its value or use.

A Marketable title is typically determined through a title search and examination, which involves reviewing public records, such as deeds, mortgages, liens, and easements, to identify any defects or encumbrances on the property’s title.

Title searches and examinations are typically conducted by title companies or attorneys specialising in real estate law. These professionals investigate the property’s history and legal records to verify the ownership and identify any potential issues.

Title insurance protects property owners and lenders against financial loss due to defects or problems with the property’s title. By purchasing title insurance, buyers can obtain coverage for potential title defects that may arise after the purchase.

Yes, defects in title can often be cured through legal remedies such as quiet title actions, releases of liens, corrective deeds, or negotiations with affected parties. However, the process for curing title defects can be time-consuming and costly.

If a property does not have a marketable title, it may be difficult to sell or finance. Buyers may be unwilling to purchase the property, or lenders may be unwilling to provide financing until the title issues are resolved.

Some real estate transactions may involve special circumstances or agreements where parties accept certain title defects or risks. However, these exceptions should be clearly documented and understood by all parties involved.

To ensure you have a marketable title when purchasing property, it is essential to conduct a thorough title search, obtain title insurance, and work with experienced professionals, such as real estate agents, attorneys, and title companies, to identify and address any title issues before closing the transaction.