What does the term "marketable title" refer to?

The term "marketable title" refers to a title that is clear and free from litigation risk. A marketable title is one that can be legally and readily conveyed to a new owner without any potential issues that could affect ownership rights. This means that the title is not only free of liens and encumbrances but also does not have any outstanding disputes or claims that could result in legal action. Buyers typically seek marketable titles when purchasing property to ensure they have a secure and unchallenged right to the property.

In contrast, titles with known defects, titles achieved through adverse possession, and titles served through a quitclaim deed may carry risks or uncertainties that render them less than marketable. Known defects could lead to disputes over rightful ownership, adverse possession indicates a claim based on continuous occupancy rather than a clear chain of title, and quitclaim deeds do not guarantee that the title is free from defects—they simply transfer whatever interest the grantor may have. Therefore, these options do not fulfill the criteria for a marketable title.