Also known as:title standard · marketable title standards
Written by attorneys · grounded in primary & secondary sources — see below
Criteria by which a real-estate title can be evaluated to determine whether it is defective or marketable. Title standards identify defects such as unreleased liens, breaks in the chain of title, outstanding interests, and pending litigation that may render title unmarketable. Contracts frequently adopt a title standard such as marketable title or the less demanding insurable title and allow the seller a period to cure defects before closing.
Sources & Authorities
How it applies
Common Examples
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Insurable Title Meets Contract Standard
Threshold Capital contracted to purchase an industrial site from Talon Security. The agreement required only insurable title. A prior bankruptcy left an ambiguous lien release in the chain of title. A national title insurer agreed in writing to issue a standard policy at regular rates with an endorsement addressing the lien. Talon Security tendered the policy commitment at closing, but Threshold Capital refused to perform. Because the contract adopted the insurable-title standard and that standard was satisfied, Talon Security can enforce the agreement.
Stale Claim Extinguished by Title Act
Theresa Tucker inherited land from a predecessor whose 1955 deed had never been recorded. A 1962 deed in the chain created a potential gap. Under the state's marketable record title act, any interest not re-recorded within the statutory period was extinguished. Twin Rivers Bank agreed to lend on the property once the act cleared the ancient defect. The bank treated the title as marketable under the governing title standards.
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Common Law
Study Supplements
Dictionaries
Marshall v. Hollywood, Inc.236 So. 2d 114 (Fla. 1970)
Common questions
Frequently Asked
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What title defects commonly render title unmarketable under title standards?+
Unreleased liens, breaks in the chain of title, outstanding easements or covenants, and pending litigation that clouds title are classic defects. A buyer may rescind if the seller cannot cure the defect by closing.
Supporting sources
How does an insurable-title standard differ from a marketable-title standard?+
Insurable title requires only that a reputable insurer issue a standard policy at ordinary rates. Marketable title demands a title free from reasonable doubt that a prudent purchaser would accept. The insurable standard is often less strict and shifts risk to the insurer.
Supporting sources
When may a buyer rescind for failure to deliver marketable title?+
A buyer may rescind when the seller cannot cure a defect that renders title unmarketable by the closing date or within any contractual cure period. Pending litigation or unreleased liens that remain on the record at closing typically justify rescission.
Supporting sources
941 N.E.2d 40 (Mass. 2011)Property
…assignments combined with other evidence could suffice. They argue postsale assignments were customary in the industry and cite Title Standard No. 58 (3). To the extent plaintiffs rely on that title standard to claim an entity that did not hold a mortgage may foreclose and then cure title by a later assignment, their reliance is…
Real PropertyReal estate sales contracts · Marketability of titleNEXTGENFoundational