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Real Property âą Conveyances
PROP#160
Legal Definition
Mortgages, liens, restrictive covenants, easements, and significant encroachments render title unmarketable (except for easements that are beneficial, visible, or known to the buyer).
Plain English Explanation
Some common examples of how an encumbrance can make a title unmarketable:
(1) Mortgages and liens: If the property has a mortgage or lien (like if the seller owes money on it), itâs unmarketable until those debts are cleared. Nobody wants to buy a house and find out thereâs still a loan hanging over it!
(2) Restrictive covenants: These are promises attached to the property that limit what you can do with it, like âno building a second storyâ or âyou canât run a business here.â If a property has restrictive covenants that could be a problem for a buyerâs plans, it could make the title unmarketable.
(3) Easements: An easement is the right for someone else to use part of your property (like letting a neighborâs driveway cut through your land). Easements can make a title unmarketable unless theyâre beneficial, visible, or the buyer already knows and accepts them. So, if the easement helps the buyer, like giving access to a road, or itâs obvious (like a shared driveway), it might not be a deal-breaker.
(4) Significant encroachments: If your neighborâs fence or shed is creeping over onto the property youâre buying, thatâs a big red flag. Major encroachments can make the title unmarketable because they create a potential conflict with neighboring property owners.
(1) Mortgages and liens: If the property has a mortgage or lien (like if the seller owes money on it), itâs unmarketable until those debts are cleared. Nobody wants to buy a house and find out thereâs still a loan hanging over it!
(2) Restrictive covenants: These are promises attached to the property that limit what you can do with it, like âno building a second storyâ or âyou canât run a business here.â If a property has restrictive covenants that could be a problem for a buyerâs plans, it could make the title unmarketable.
(3) Easements: An easement is the right for someone else to use part of your property (like letting a neighborâs driveway cut through your land). Easements can make a title unmarketable unless theyâre beneficial, visible, or the buyer already knows and accepts them. So, if the easement helps the buyer, like giving access to a road, or itâs obvious (like a shared driveway), it might not be a deal-breaker.
(4) Significant encroachments: If your neighborâs fence or shed is creeping over onto the property youâre buying, thatâs a big red flag. Major encroachments can make the title unmarketable because they create a potential conflict with neighboring property owners.
Related Concepts
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In assessing the warranties under a general warranty deed, what is Warranty?
In land sale contracts, when is time of the essence?
In land sale contracts, when must each party tender performance?
Under a notice recording statute, when does a subsequent Bona Fide Purchaser prevail?
Under a race-notice recording statute, when does a subsequent Bona Fide Purchaser prevail?
Under a race recording statute, when does a subsequent Bona Fide Purchaser prevail?
What are the 3 types of deeds and warranties?
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What is a wild deed?
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What is the Shelter Rule?
What remedies are available to a buyer upon violation of an Implied Covenant of Marketable Title?
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Who qualifies as a purchaser for value?
