What is referred to as a title that is free of liens and encumbrances?

What is referred to as a title that is free of liens and encumbrances?

• A. Cloud Title
• B. Clear Title
• C. Open Title
• D. Marketable Title

Answer: (B)

A title that is free of liens and encumbrances is referred to as a clear title. This designation indicates that the property is unencumbered and that the owner has the full right to sell, transfer, or lease the property without any legal restrictions stemming from past claims such as mortgages, liens, or other legal disputes. Having a clear title is vital for both buyers and sellers in real estate transactions, as it ensures that the buyer is acquiring a property with no outstanding financial obligations or legal troubles that could complicate ownership. In contrast, a cloud title refers to a title that has some defect or unresolved claim that could interfere with the ability to transfer ownership. An open title can effectively mean a title that has not yet been fully examined or is in the process of being acquired; this term is generally not used to signify cleanliness in terms of liens or encumbrances. Marketable title, while similar in meaning, may imply that the title can be effectively transferred, but not necessarily that it is completely free from all liens and claims.

A title that is free of liens and encumbrances is referred to as a clear title. This designation indicates that the property is unencumbered and that the owner has the full right to sell, transfer, or lease the property without any legal restrictions stemming from past claims such as mortgages, liens, or other legal disputes.

Having a clear title is vital for both buyers and sellers in real estate transactions, as it ensures that the buyer is acquiring a property with no outstanding financial obligations or legal troubles that could complicate ownership.

In contrast, a cloud title refers to a title that has some defect or unresolved claim that could interfere with the ability to transfer ownership. An open title can effectively mean a title that has not yet been fully examined or is in the process of being acquired; this term is generally not used to signify cleanliness in terms of liens or encumbrances. Marketable title, while similar in meaning, may imply that the title can be effectively transferred, but not necessarily that it is completely free from all liens and claims.