1. Title to the property constitutes all elements or attributes constituting ownership
1.1. Every land sales contract contains an implied condition that the seller will convey "Marketable Title"
2. Marketable Title= Title that is secure enough that a reasonable person, knowing all the facts, would accept and pay for it.
2.1. The title is free from reasonable doubt as to the validity and reasonably free from the prospect of litigation
3. If the seller fails to cure all defects to the title, a purchaser may refuse to close and rescind the contract
4. When is title unmarketable
4.1. Mere possibility or suspicion is insufficient
4.1.1. Ie. potential missing/unknown heir having claim after probate decree
4.1.2. Lien or mortgage past statute of limitations on enforcement and involving creditors then dead
4.2. Existence of an encumbrance undisclosed to the buyer and not part of his bargain creates an unmarketable title
4.2.1. Not required to buy less than what you paid for
4.2.2. Landlocked property is not unmarketable on that account alone
4.2.3. Typical Encumbrances
4.2.3.1. Undisclosed co-owner
4.2.3.2. mortgages or defects in title
4.2.3.3. easements
4.2.3.4. real covenants or equitable services
4.2.3.5. leases
4.2.3.6. mineral rights
4.2.3.7. options
4.2.3.8. flaws in the deed records
4.2.3.9. erroneous acreage designations
4.2.3.10. ownership based upon adverse possession
4.2.4. Violations of a stuate, code or ordinance is a defect only when likely to be prosecuted
4.2.4.1. ie. Toxic waste doesn't make title unmarketable
4.3. Defective Deed Records
4.3.1. Any flaw in the deed record that could lead to litigation is unmarketable
4.3.1.1. Deeds are filed in local government offices in the county land is situated.
4.3.1.1.1. These assure buyers of title
4.3.1.2. May be defective in many ways
4.3.1.2.1. Incorrectly described in prior deed
4.3.1.2.2. names in links differ to recorded
4.3.1.2.3. not property notarized
4.3.1.2.4. Recorded out of order
4.3.1.2.5. not legally authorized
4.3.1.2.6. lacked capacity to transfer.
4.4. Title Acquired by Adverse Possession
4.4.1. Marketable in most states, but must use clear and convincing evidence of all the elements of adverse possession, or title is unmarketable.