MBE Rules · Real Property
Marketable title
The rule
A land sale contract impliedly warrants the seller will deliver marketable title at closing — title free from reasonable doubt and threat of litigation. Defects: chain breaks, undisclosed encumbrances, adverse possession claims, zoning violations (existing, not future), significant encroachments.
In plain English
When you buy property, the seller must ensure that the ownership is clear and won't lead to legal disputes.
Worked example
Buyer agrees to purchase a house, but discovers an old mortgage that wasn't paid off. This makes the title unmarketable, and the buyer can back out of the deal.
Memory hook
Marketable means no messes. Seller ensures a clean title, free from disputes and defects.
The trap
Students think: any zoning issue affects marketability. Wrong, because only existing violations matter. The actual test is current defects like encumbrances or encroachments.
How examiners test it
The MBE loves: buyer discovers an easement or zoning issue before closing. Trap: assuming future zoning changes affect marketability — only current issues do.
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