A title to a piece of land is considered unmarketable if there are encumbrances on the land, such as mortgages, unless the buyer waives them. Title is also unmarketable if the land was obtained through adverse possession, or if the land violates any zoning laws.

What happens if the title is not marketable?

If the seller has failed to provide marketable title, the buyer is permitted to rescind the sale—that is, to back out of the contract and receive a refund of the money paid for the property.

Why do we need a marketable title?

Marketable title (real estate) is a title that a court of equity considers to be so free from defect that it will legally force its acceptance by a buyer. ... If you cannot produce a clear title of deed to the property then the prospective buyer should expect to lose in a specific performance action.

Is marketable title a perfect title?

But, what is the difference? A marketable title is a title that is free and clear of any defects or clouds that a reasonable buyer would find objectionable. This is a fairly stringent standard, but buyers should also be aware that a marketable title does not have to be a perfect title.

What is acceptable evidence of marketable title?

The best evidence of marketable title is a lender`s or owner`s title insurance policy. But when a title insurance company is willing to insure the title, the buyer or lender feels confident the title is marketable.

What is Marketable Title Vs Insurable Title | WhiteBoard Wednesday #5

29 related questions found

Which document is not considered evidence of marketable title?

Which of the following is not considered evidence of marketable title? A record of all previous owners of the property ( title insurance documents include all liens and defects of record and easements, but not the chain of title. Which title insurance guarantees against every threat?

Is it safe to give a Xerox copy of land title?

You cannot complete the transfer of ownership of a property via sale, using only a photocopy of the Certificate of Title. But unfortunately, that doesn't stop unscrupulous scammers.

Do easements render title unmarketable?

An easement that reduces the value of the property renders title unmarketable.

What would prevent a seller from providing marketable title?

An implied promise in a contract when a seller is selling land to a buyer is that the seller will deliver marketable title to the buyer at the date of the closing. A title to a piece of land is considered unmarketable if there are encumbrances on the land, such as mortgages, unless the buyer waives them.

Does lack of access make title unmarketable?

In support of its unmarketability argument, Woody Creek equates the lack of permanent access to a complete lack of access and cites a legal treatise for the proposition that "[t]he majority rule is that lack of access makes title unmarketable." Aplt. Br. 37-38.

What is a clear and marketable title?

A property with a clear title is free from all encumbrances. ... On the other hand, a property with a marketable title has certain encumbrances but the title is clear enough to sell at a fair market price and without concern for litigation, according to Connecticut attorney Judith Johannsen.

What is marketable title in New York?

What Does “Marketable” Title Mean?” New York case law defines “marketable title” as title which is free from “material” and “unreasonable” encumbrances, liens, judgments or defects. A buyer would not be required to accept title to real property upon which there exists a material or unreasonable defect or encumbrance.

What is an example of marketable title?

Suppose, for example, that Mary buys land from Bob. The contract of sale declares that Bob holds marketable title to the land. After paying Bob, Mary receives a letter from an attorney saying that a business called Lou's Used Cars holds a lien on the property because Bob is using it as collateral for a car loan.

Is marketable title a warranty?

In property law, title refers to the bundle of rights and interests (either legal or equitable) that someone owns in a piece of property. ... All contracts for property sales carry an implied warranty that title is marketable, unless there is an express agreement to the contrary.

What types of defects could render a title unmarketable?

Unmarketable title defects can include:

• Restrictive covenants.
• Outstanding mortgages and other liens.
• Easements.
• Adverse possession claims.
• Encroachments.
• Variations in: the chain of title; and. the names of the grantors or grantees.

What is a marketable title act?

Certain states have adopted legislation known as the Marketable Title Act or the Marketable Record Title Act (the “Marketable Title Acts”) that automatically eliminate encumbrances on title to real property, including restrictive covenants, after the passage of statutory time periods.

Which one of the following does not render the title to real property generally unmarketable?

A very slight encroachment onto an adjacent landowner's land would not render title to land unmarketable. Regardless of whether an adjacent landowner is encroaching on the seller's land or vice versa, an encroachment will not render title unmarketable if: 1.

What is the difference between legal title and equitable title?

While a legal title focuses on the duties of the property owner, equitable title refers to the enjoyment of the property. Equitable title is the benefits the buyer will get to use and enjoy when he or she becomes the legal owner. ... Equitable title does, however, grant the person more consistent control over the property.

What's typically used to prove there are no encroachments on the property?

If you're not encroaching, you should be able to get proof of that by having a survey done that shows the property boundaries. Or maybe you have the right to the property through an easement or deed. If, however, your neighbor can prove that you are encroaching, you can probably expect the court to rule against you.

What types of defects could render a title unmarketable What are the implications of purchasing property with an unmarketable title?

Unless the contract provides otherwise (in a “subject to” clause), any of the following could render title unmarketable: easements, restrictions, violations of restrictions, zoning ordinance violations, existing leases, encroachments (except slight ones), and outstanding mineral and oil rights.

Is it OK to buy land with tax declaration only?

CAN I PURCHASE A PROPERTY WITH THE SELLERS POSSESSING ONLY A TAX DECLARATION? The answer is yes, you can, but it is VERY RISKY. ... Buying the property from someone who isn't legally entitled to the property; and. It could result to a Double Sale or a case when the property is sold to 2 or more different persons.

Can anyone get a certified true copy of land title?

The Register of Deeds should be able to provide you a “Certified True Copy” of the title to ensure its authenticity. Request the seller of the property to give you a photocopy of the title since the Register of Deeds will need information such as the title number and the owner's name.

Is Land Title a public document?

Land registration is the process wherein the state provides a public record of the land title itself upon which a prospective purchaser or someone else interested may rely on.

What does a suit to quiet title do?

Definition. A special legal proceeding to determine ownership of real property. A party with a claim of ownership to land can file an action to quiet title, which serves as a sort of lawsuit against anyone and everyone else who has a claim to the land.

How far back does a typical title search in Illinois go?

In the case of subdivided residential land, the search for conveyances, judgments and liens must go back 20 years. The real estate taxes must be searched for a 5- year period.