What Is A Marketable Title?
The term title indicates the rights of possession and ownership for a specific piece of property, which must be marketable before it can be sold to another party. Marketable means that the title is clear of liens or other title defects that would be unsuitable for a well-advised, educated buyer in the course of a reasonable business.
Not all title defects are part of public records. It is possible such “hidden” defects may not be found in the course of a title search, and this is where title insurance comes into play. Title insurance will protect you against those hidden issues that were not found while purchasing the property. In the event a hidden defect is found, your title insurer pays the cost to defend your ownership in Court, or covers the financial loss if the defect cannot be fixed.
|Discovered Defects||Hidden Defects|
|Real property taxes||Impersonation/ID theft|
|Court judgments||Married person identifying as single|
|Utility easements||Undisclosed heirs|
|Construction liens||Clerical errors at the courthouse|
|Incorrect legal description of property||Deeds signed by minors/mentally incompetent|
|Improperly probated will||Confusion from similar/common names|