View as Web Page Subscribe Send to a Friend
Marshall, Roth & Gregory, P.C.

Add a Title for Your Newsletter Here

Article Title


Lyman J. (Greg) Gregory, III



90 Southside Avenue,

Ste 100

Asheville, NC 28801

90 Southside Avenue Suite 100


90 Southside Avenue Suite 100

A Legal Moment

Title Issues - Part I


        Today, I begin a series of newsletters addressing the concept of title by reviewing the definitions of "marketable title" and "insurable title."

        Delivery of marketable title (also stated as "clear title," "good title" and "merchantable title") is at the heart of every real estate transaction.  This requirement is so basic that if a contract is silent about the quality of title a seller must convey, then marketable title is implied.

        Despite its importance, there is very little guidance on what marketable title is, and this lack can lead to immense frustration.  Whether title is marketable is fundamentally a legal opinion, and, as we all know, lawyers often differ in their opinions.

        The most quoted definition states that a "'marketable title' is one free from reasonable doubt in law or fact as to its validity."  This standard is obviously vague.  I find the following alternative definition a little more helpful: "a title that is free from major defect, such as a judgment or lien, and can be freely conveyed to a reasonable buyer."   These statements essentially mean title that is good enough for the buyer to be confident she is getting complete ownership of the property.

        Courts have also articulated three additional rules regarding marketable title that actually help in negotiating and addressing title defects.  First, marketable title does not mean perfect title.  If you are working in a transaction where a title issues arises, do not despair immediately.  Many title defects are not so bad as to defeat contracts.  Second, marketable title does not mean one that the buyer is willing to accept.  The buyer does not get to dictate what good title is.  A title with a technical defect may still comply with the contract and require the parties to close.  Third, as a corollary to the last rule, marketable title is not defined solely by the opinion of the buyer's attorney; however, there is no definitive way to determine what opinion controls absent litigation.

        In contrast to marketable title, "insurable title" may have encumbrances or defects that a reasonable buyer would not normally accept.  However, a title insurance company may be willing to insure against loss from the defect.  One common example is an uncanceled deed of trust due greater than 15 years ago.  Such a deed of trust is a lien against the property, but by state statute, it is deemed canceled.  Most title insurance companies will insure over the risk of that lender demanding payment.  By covering title defects, title insurance allows some deals to go forward that might not otherwise.

          In upcoming newsletters, I will review the buyer's and seller's roles regarding title under the Offer to Purchase and Contract, and will give examples of "bad title" with suggestions on how you may be helpful in resolving them.



Do not hesitate to contact me to receive more information on this topic or to suggest topics for future editions of 'A Legal Moment'. You may not rely on this content as legal advice for any specific situation, but should instead contact an attorney for specific advice.

Marshall, Roth & Gregory, P.C. • 90 Southside Avenue Suite 100 • Asheville, NC 28801
Subscribe | Unsubscribe | Send to a Friend | Preferences | Report Spam
Powered by MyNewsletterBuilder