What is a "title defect"?

A title defect refers to any issue that impacts the validity or marketability of a property's title. This can encompass various concerns, such as liens, encumbrances, or errors in public records that could undermine a buyer's ownership rights or the ability to sell the property in the future. If there are flaws in the title, it can create complications during a transaction, potentially leading to legal disputes or financial losses for the parties involved.

The definition acknowledges that a clear and marketable title is essential for real estate transactions, as it assures buyers that they have legitimate ownership rights free from potential claims or disputes. A title defect can therefore cause significant problems in real estate dealings and is a critical consideration for buyers, sellers, and title insurance providers.