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Unmarketable Title
Practical Law UK Glossary 3-566-2050 (Approx. 3 pages)
Glossary
Unmarketable Title
Title to real property with an encumbrance or a cloud on the property that is sufficient enough to justify a potential:
- Purchaser not purchasing the property.
- Lender not funding a loan secured by the property.
- Tenant not leasing the property.
Unmarketable title is a covered risk in the 2006 American Land Title Association (ALTA) owner's and loan title insurance policies.
The ALTA title insurance policy coverage for unmarketable title:
- Applies only to those claims resulting from title defects, such as an encumbrance or cloud on the title.
- Does not include problems relating to the use of the property, such as environmental contamination.
Unmarketable title is different than insurable title. What constitutes unmarketable title is determined by the local statutes and case law of the state in which the real property is located.
Unmarketable title defects can include:
- Restrictive covenants.
- Outstanding mortgages and other liens.
- Easements.
- Adverse possession claims.
- Encroachments.
- Variations in:
- the chain of title; and
- the names of the grantors or grantees.