A title contingency in real estate is a condition that requires the seller to provide a clear and marketable title to the property before the sale can be completed. It is typically included in the Buy-Sell Agreement or contract and is designed to protect the interests of both the buyer and the seller.
A clear and marketable title is a legal term that refers to the ownership of a property. In order for a title to be clear and marketable, it must not have any encumbrances or liens that could potentially affect the ownership of the property. Encumbrances can include mortgages, liens, or judgments, and can prevent the property from being sold or transferred.
If a title contingency is included in the contract, it means that the sale is dependent on the seller being able to provide a clear and marketable title to the property. If there are any issues with the title, the buyer may be able to negotiate for the seller to resolve them or may be able to cancel the contract.
The title contingency is typically written with a specific timeline in mind, such as a certain number of days after the contract is signed. If the seller is unable to provide a clear and marketable title within this timeframe, they may be in breach of the contract and the buyer may be able to cancel the contract.
A title contingency is an important tool for protecting the interests of both the buyer and the seller in a real estate transaction, as it helps to ensure that the sale is dependent on the seller being able to provide a clear and marketable title to the property.
Category : Lexicon