Unmarketable Title
Definition:
Unmarketable Title refers to a property title that has legal defects or unresolved issues preventing it from being sold, transferred, or mortgaged without risk. Such defects may include liens, claims, easements, boundary disputes, or unclear ownership records. A title is considered unmarketable when it fails to provide the buyer with clear and undisputed ownership rights.
Unmarketable Title Information
An **Unmarketable Title** poses a significant problem in real estate transactions because it exposes buyers or lenders to potential future claims. Common causes include unpaid property taxes, unresolved probate matters, missing heirs, forged deeds, or unrecorded liens. During a **title search**, these issues are identified and must typically be resolved before closing. Title insurance companies may refuse to insure a property with an unmarketable title until defects are cleared. Resolving unmarketable title issues ensures that ownership can be legally transferred and that buyers receive full protection against competing ownership claims.
Florida Legal Definition
Under **Florida law**, an **Unmarketable Title** is defined through real property and case law as one that exposes the purchaser to the reasonable possibility of litigation or future loss. A marketable title must be free from defects, liens, or encumbrances that materially affect ownership or value. Florida’s **Marketable Record Title Act (MRTA)**, codified in **Chapter 712, Florida Statutes**, helps eliminate old claims or encumbrances to make property titles clear and marketable after 30 years of recorded ownership. If a title defect is discovered, the buyer may refuse to complete the transaction or demand correction under Florida real estate contract law.
How It’s Used in Practice
In practice, **Unmarketable Title** issues are most often discovered during the due diligence or title search phase of a Florida real estate transaction. Title companies and attorneys investigate ownership history and encumbrances to ensure that the title is “marketable.” If problems such as an unreleased mortgage or an unrecorded easement are found, the seller is usually required to resolve them before closing. Buyers can back out of a sale or renegotiate terms if the seller cannot deliver marketable title. Real estate professionals rely on title insurance and public record filings to prevent or correct unmarketable title issues before completing transactions.
Key Takeaways
- **Unmarketable Title** means ownership of property is clouded by legal defects or disputes.
- Common issues include liens, encumbrances, boundary conflicts, or unclear ownership records.
- Under **Florida’s Marketable Record Title Act (Chapter 712, Florida Statutes)**, old claims can be extinguished after 30 years.
- Buyers may refuse to close or require correction if a title is unmarketable.
- Title searches and title insurance help identify and resolve defects before transfer.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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