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The Divorce Encyclopedia
Marketable Title

Term Definition Marketable Title - a title not subject to reasonable doubt or suspicion of invalidity in the mind of a reasonable and intelligent person.
Application in Divorce When a property is sold, normally its title, as the recorded deed is called, is searched. The search, which is normally done by a lawyer or paralegal, is guaranteed by a title insurance company. This guarantee certifies that the title is clear of liens, encumbrances and flaws, and it protects the buyer from any claims that may arise because of these attachment or defects.

Normally, a title search goes back 70 or more years, checking each transfer of the property. Title insurance indemnifies the new owner against claims arising from such defects. It certifies the title as marketable.

A title search would disclose that a property is encumbered by a spousal lien. This attachment can happen when one spouse petitions the court to put a lien on marital property subject to distribution when it might otherwise be sold by the other.

One of the most common flaws in a title happens when both (in the case of a husband and wife) or all of the owners fail to sign off as part of a sale.

Hard as it may be to imagine, practically every lawyer knows at least one story of a title flawed by the failure of both husband and wife to properly sign off. One Pennsylvania lawyer tells a divorcing couple who got into an argument in the process of signing their marital settlement agreement and somehow when the dust settled everyone overlooked the fact that the wife had failed to sign the deed to the family home. The defect was not discovered for years and several sales.

Recording a deed in the courthouse in no way guarantees that it is without flaws.

Marketable titles are important. Not only to they permit the easy sale of an property, they also insure that the market for real estate in a community is fluid and open.

A marketable title is sometimes called a "clear title," one which a prudent person guided by competent legal advice would be willing to accept and purchase at a fair market value. It is free and clear of liens. When a couple pay off the marital home, settlement papers certifying a paid note and mortgage, are normally recorded in the courthouse.

A marketable title is one which a title insurance company would insure.

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