What is Marketable Title, and What Does it Have to Do with Buying or Selling a Home?
Real estate, before it can be sold, must be marketable. In general terms it must be free from what are called encumbrances. That is, if it has liens, clouds of titles (unclear title), title defects, or other risks of litigation attached it, it is not marketable. Having a house that has marketable title gives both buyers and sellers the piece of mind that property issues will not come up later after the purchase or sale.
How Do We Make Sure that a Piece of Real Estate has Marketable Title?
Title searches are the best way to make sure a piece of real property has marketable title. In this process an experienced title searcher will go and examine the public records in the city where the real property is located. This person will examine the grantor and grantee indexes for all recorded documents in the land registry concerning a particular piece of property. This search will produce a map of the chain of title. What is a Chain of Title?
A chain of title is what is produced by a title search. The chain of title is evidence that a piece of property has validly passed down thorough the years from one owner to the next without problems. Will the Title Search Determine Anything Else?
The title search will also determine if there are any encumbrances on the property, such as mortgages. What if the Title Search Has No Problems in it?
If the title search turns up nothing other than a valid chain of title, and if there are no encumbrances on the property, the title is "good and marketable." Do Most Properties have Marketable Title?
As a title search of most properties will reveal, almost no property has marketable title. Title searches usually turn up encumbrances on properties such as mortgages, real estate taxes, liens for sewers, roadways, sidewalks, and other municipal improvements, federal taxes, government claims, legal judgments, foreclosures, condemnations, covenants, and easements. When you do a title search, you are not usually looking for marketable title, but rather you are looking to determine what liens are on the property. Should I Contact an Attorney Regarding my Marketable Title Issues?
A property law attorney should be able to help you out on your marketable title issue. Property law is a confusing area of the law, and one should never go it alone. |
