Also known as:chain of title defect · chains of title defects · title defects · defective chain of title
Written by attorneys · grounded in primary & secondary sources — see below
Breaks or gaps in the recorded sequence of ownership transfers that cloud the marketability of real property title. Such defects include missing deeds, unreleased prior interests, or unrecorded conveyances that create reasonable doubt for a prudent purchaser. A buyer may refuse to close or rescind if the seller cannot cure the defect by the contractual deadline.
Sources & Authorities
How it applies
Common Examples
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Unreleased Option Clouds Factory Sale
Allied Production agreed to sell an aging factory to Dusk Plastics for $4.8 million and promised marketable title at closing with thirty days to cure defects. A title search revealed a recorded 1975 option allowing a long-departed tenant to repurchase part of the land. The option holder could not be located, so Allied could not obtain a release or quiet title within the cure period. Dusk refused to close, and the court permitted rescission because the break in the chain prevented delivery of marketable title.
Missing Deed Link Breaks Insurance Claim
Colin Chambers purchased waterfront land and obtained a title insurance policy from Old Republic. Years later a foreclosure revealed that an intermediate deed in the chain had never been recorded, leaving an apparent gap between two prior owners. Old Republic denied coverage for the resulting cloud, asserting that the defect existed before the policy issued. The court examined the chain and held that the unrecorded conveyance constituted a chain-of-title defect that the insurer had no duty to defend.
Put it into practice
Test Yourself
10
Practice Questions5
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Common Law
Casebooks
MacDonald v. Old Republic Natl. Title Ins. Co.882 F. Supp. 2d 236 (D. Mass. 2012)
Common questions
Frequently Asked
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What kinds of problems count as chain of title defects?+
Chain of title defects include missing or unrecorded deeds, unreleased liens, and gaps between successive conveyances that create reasonable doubt about ownership. A buyer facing such a defect may rescind if the seller cannot cure by closing.
Supporting sources
How does a chain of title defect affect the seller's duty to convey marketable title?+
A seller must deliver title free from reasonable doubt. When a break in the chain exists, a prudent purchaser would refuse the title, allowing the buyer to refuse performance or rescind unless the contract permits cure within the stated period.
Supporting sources
Does tender of insurable title cure a chain of title defect when the contract requires marketable title?+
No. Insurable title is a lower standard that a title company will cover at ordinary rates. A contract demanding marketable title is not satisfied by insurance alone when the underlying defect, such as an unreleased option or missing deed, remains of record.
Supporting sources
Real PropertyOwnership of real property · Landlord-tenant lawUBEFoundational