Also known as: clear titles · marketable title · good title
Written by attorneys · grounded in primary & secondary sources — see below
A title to property that is free from any encumbrances, burdens, or other limitations. It is also termed good title and is synonymous with marketable title in the context of real estate conveyances.
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Caitlin Crowley contracted to sell land to Continental Bank. A title search revealed an unreleased judgment lien against the property. Because the lien created reasonable doubt, Continental Bank refused to close and demanded rescission of the contract.
Cecilia Cabrera agreed to purchase a parcel from Compass Logistics. The chain of title showed a recorded easement that had never been released. Compass Logistics could not cure the defect before closing, so Cecilia Cabrera rescinded and recovered her deposit.
Chloe Chen contracted to buy property from Cascade Manufacturing. The agreement required only insurable title. A title company agreed to insure at standard rates despite a minor recorded covenant, allowing the sale to close without further cure.
Connor Clark inherited property subject to a possible restriction on alienation. He conveyed the land by warranty deed to Cedar Creek Farms. The court confirmed that the deed passed clear title because state policy favored unrestricted alienability of fees.
Christian Coleman transferred assets to avoid creditors. A bankruptcy trustee sought to recover the property. The transferee could not assert clear title against the estate because the conveyance was avoidable as fraudulent.
Cade Carpenter purchased property and later discovered undisclosed liens. Investigators found that the seller had issued a false title policy. The liens prevented clear title and supported a false-pretenses prosecution.
Unreleased liens, breaks in the chain of title, outstanding easements or covenants, and litigation that clouds title all render title unmarketable. The buyer may rescind if the seller cannot cure by closing.
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No. Marketable title is the stricter standard. Some contracts accept only insurable title, which a reputable insurer will cover at standard rates even if it falls short of full marketability.
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A buyer may refuse when the title contains reasonable doubt that a prudent purchaser would reject. Recorded encumbrances and adverse claims are classic examples that permit rescission or damages.
Supporting sources
…petitioner with this information, he responded by issuing, as an agent of a title insurance company, a title policy guaranteeing clear title to the property. By this action, petitioner also defrauded that insurance company by requiring it to pay the outstanding liens. The investigators, concluding that there was probable cause…