What is a "marketable title"?

A marketable title is defined as a title that is free from significant encumbrances or defects, meaning it is clear and legally sufficient for the property owner to sell or transfer ownership without issues. This status assures potential buyers that there are no unresolved claims, liens, or outstanding legal questions surrounding the property that could impede their ownership or use.

In real estate transactions, having a marketable title is crucial because it provides peace of mind to buyers and lenders, facilitating smoother transfers and enabling the new owner to take full possession without the risk of legal challenges or financial liabilities stemming from previous ownership.

Other answers describe situations that do not align with the concept of marketability; a contested title in court indicates existing disputes, temporary titles imply some sort of provisional status that might not be reliable for retaining ownership, and a title that includes existing leases indicates that the property may have restrictions or obligations that could complicate ownership or its marketability.