What might be considered a defect in a title?

A defect in a title refers to any issue that interferes with the clear ownership of a property and could potentially affect the buyer's rights to the property. The presence of previously unresolved liens is a prime example of a title defect. Liens are claims or legal rights against a property, typically for the payment of a debt or obligation. If such liens exist and have not been resolved before the sale or transfer of property, they can create clouded title issues or even lead to financial loss for the new owner, thereby affecting their rights and ability to freely utilize the property.

In contrast, while upside-down mortgages, historical land usage plans, and market value fluctuations might influence a property’s marketability or financial considerations, they do not inherently create defects in the legal ownership of the title itself. An upside-down mortgage is a financial situation rather than a title issue. Historical land usage plans may provide context about the property's prior usages but don't affect its title. Market value fluctuations speak to the real estate market dynamics and potential investment risk, but they do not impact the legal ownership itself. Thus, the presence of unresolved liens poses a direct legal challenge to title certainty, making it a recognized defect.