Marketable title

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. Marketable title does not assume that absolute absence of defect, but rather a title that a prudent, educated buyer in the reasonable course of business would accept. For real estate practitioners, the most complete reference to title issues is found in the preprinted wording contained within an agreement/contract. 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. This is also known as a merchantable title which means that a title that is not perfect, but is considered acceptable to a reasonably well-informed buyer.

In the absence of an agreement to the contrary, there is an implied undertaking in the contract that the vendor (person selling the property) has a marketable title. The contract typically provides that on failure of a vendor to deliver good and marketable title, the vendee (buyer) may rescind the contract and recover any deposit.


Merger

If a deed is delivered and it has no warranty of title, the buyer has no recourse because the deed supersedes the contract. This means that the initial contract is no longer in effect.


Closing Date

Sellers only have to tender good and marketable title on the date the conveyance is executed (date of closing). So a seller may contract to sell property it does not currently possess. Liability will be imposed on the seller for breach only if the seller does not have good and marketable title on the date of closing.


* Defects that make title unmarketable

  1. Outstanding mortgages/liens
  2. Restrictive covenants
  3. Outstanding future interests of others in the property, i.e. a "reverter".
  4. Encumbrances
  5. Easements on the property
  6. Variations in the names of grantors and grantees
  7. Variations in the chain of title
  8. Outstanding dower interests.
  9. Adverse possession claims
  10. Structural encroachments
  11. Existing violations of equitable servitudes or covenants
  12. Zoning restriction violations


* Actions that do not defeat marketability

  1. Zoning restrictions (so long as there are no current violations of the restrictions)
  2. Other land use regulations





Wikimedia Foundation. 2010.

Игры ⚽ Поможем решить контрольную работу

Look at other dictionaries:

  • marketable title — see title Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. marketable title n …   Law dictionary

  • marketable title — A clear, reasonably incontestable title to a piece of real estate that is good for transaction purposes. Bloomberg Financial Dictionary * * * marketable title marketable title ➔ title * * * marketable title UK US noun [U] PROPERTY, LAW ► the… …   Financial and business terms

  • marketable title — A title good as a matter of law, its validity not being dependent upon the determination of any question of fact. Wurzweiler v Cox, 138 Or 110, 5 P2d 699; First Nat. Bank of St. Johnsbury v Laperle 117 Vt 144, 86 A2d 635, 30 ALR2d 958. A title… …   Ballentine's law dictionary

  • marketable title — noun : a title that conveys property and the interest therein bargained for reasonably free from all liens and encumbrances save those excepted by the bargain, that does not expose the purchaser to litigation, and that he can readily sell or… …   Useful english dictionary

  • marketable title — Law. a title to real property that is free from encumbrances, litigation, and other defects and that can readily be sold or mortgaged to a reasonable buyer or mortgagee. Also called good title, merchantable title, sound title. * * * …   Universalium

  • marketable title — property title that can easily be transferred to another person …   English contemporary dictionary

  • title — ti·tle n [Anglo French, inscription, legal right, from Old French, from Latin titulum inscription, chapter heading, part of the law that sanctions an action] 1 a: the means or right by which one owns or possesses property; broadly: the quality of …   Law dictionary

  • title — ti‧tle [ˈtaɪtl] noun 1. [countable] HUMAN RESOURCES JOBS a name that describes a person s job or position: • What is your job title? • Her official title is Human Resources Manager. 2. [countable] a par …   Financial and business terms

  • marketable — mar·ket·able / mär kə tə bəl/ adj 1: fit to be offered for sale: being such as may be justly or lawfully sold or bought marketable goods 2: wanted by buyers marketable securities mar·ket·abil·i·ty /ˌmär kə tə bi lə tē/ n …   Law dictionary

  • Title insurance in the United States — is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of… …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”