What might be a consequence of discovering a title defect?

A consequence of discovering a title defect is that the buyer may be released from the obligation to purchase. When a title defect is found, it indicates that there are flaws or encumbrances on the property that can affect ownership rights. These defects can include unpaid liens, unresolved claims, or issues with the prior ownership that could jeopardize the buyer's ability to own the property free and clear.

In many cases, a buyer is entitled to clear title before proceeding with the purchase. If such defects are uncovered, the buyer has the right to withdraw from the transaction without penalty, as the presence of these issues can fundamentally alter the value and security of their investment. This provision protects buyers by ensuring they are not obligated to go through with a purchase that could lead to legal disputes, loss of investment, or difficulties with future resale. The situation also motivates sellers to resolve any title issues before attempting to sell the property.