When is a title considered free of flaws?

A title is considered free of flaws when it is marketable. A marketable title signifies that the property can be sold or mortgaged without concerns about legal disputes or claims against it. This generally means that the title has clear ownership, free of defects, liens, or encumbrances that would affect a potential buyer’s interest.

For a title to be deemed marketable, it must meet several criteria, such as conforming to statutory requirements and being acceptable to a reasonable buyer. While meeting statutory requirements is important, it does not necessarily guarantee that the title is free from flaws in the sense that it can be easily transferred without issue. An active insurance policy offers protection against defects but does not mean the title itself is devoid of flaws; rather, it provides a safety net for undiscovered issues. The mere fact that a title has been passed between multiple owners also does not inherently indicate it is free from defects, as issues can arise at any point in ownership transfer.

In summary, qualifying a title as marketable encompasses an assessment of its overall status and ensures it is free from defects, making it suitable for transaction purposes.