Property Ownership
Which of the following BEST describes a 'marketable title' in South Dakota?
ATitle that has been insured by a title company
BTitle that is free from reasonable doubt, liens, and encumbrances that would affect its value✓ Correct
CTitle that has been recorded for more than 10 years
DTitle that has been confirmed by a court order
Explanation
Marketable title is title that is free from reasonable doubt about its validity, and from encumbrances or defects that a reasonable buyer would object to — title that a buyer can be compelled to accept.
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Key Terms to Know
Encumbrance
Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
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