A marketable title must be free of what at the time of closing?

A marketable title is one that is free from defects, claims, or other issues that could reasonably lead to litigation. At the time of closing, a title must provide the buyer with assurance that they can enjoy ownership of the property without fear of future disputes or legal challenges. This means that the seller must ensure that there is no unreasonable risk of litigation regarding the title.

While previous liens, potential zoning issues, and unpaid taxes can represent problems related to property ownership, they do not necessarily render a title unmarketable in every circumstance. For instance, a previous lien may be resolved or negotiated, zoning issues may be acceptable to a buyer, and unpaid taxes can often be settled before or at closing. In contrast, the presence of any reasonable risk of litigation directly affects a buyer's ability to confidently purchase the property. Therefore, a marketable title must indeed be free from any circumstances that could lead to lawsuits regarding ownership or property rights.