Question
Question #8 of 60
Which statement is TRUE about marketable title in Texas?
A) Marketable title insures that if there is a claim against the title, the claim can be defeated.
B) Texas title insurance companies insure marketable title.
C) Texas title insurance companies do not insure marketable title.
D) Marketable title exposes a purchaser to the hazard of litigation.
Which statement is TRUE about marketable title in Texas?
A) Marketable title insures that if there is a claim against the title, the claim can be defeated.
B) Texas title insurance companies insure marketable title.
C) Texas title insurance companies do not insure marketable title.
D) Marketable title exposes a purchaser to the hazard of litigation.
Ask by Schmidt Wagner. in the United States
Mar 31,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Texas title insurance companies do not insure marketable title.
Solution
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Marketable title is defined as a title that is free from significant defects or encumbrances, such that no litigation or undisclosed claims are likely to arise that would affect the property’s value.
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Title insurance companies provide a policy that protects the insured against defects or losses resulting from title issues. However, they do not “insure marketable title” per se; rather, they insure against losses arising from title defects even if the title was deemed “marketable” at the time of purchase.
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In Texas, while ensuring the title is marketable is important for a smooth transaction, title insurance companies do not insure marketable title. They offer title insurance policies that provide protection from later claims or defects, but they do not certify or insure that a title is marketable.
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Examining the options:
- Option A suggests marketable title insures that claims can be defeated; this misunderstands the concept.
- Option B states that Texas title insurance companies insure marketable title, which is not true.
- Option C correctly indicates that Texas title insurance companies do not insure marketable title.
- Option D incorrectly implies that marketable title exposes a purchaser to litigation hazards, whereas marketable title is supposed to be free of significant litigation risks.
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Therefore, the true statement is:
Answered by UpStudy AI and reviewed by a Professional Tutor
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Simplify this solution The Deep Dive
In Texas, marketable title is essential for ensuring that a property can be sold or mortgaged without disputes. It generally means that the title is free from significant defects, ensuring smooth transactions. Correctly establishing marketable title helps in protecting buyers from future legal issues, making it a crucial aspect of real estate dealings.
When it comes to title insurance, Texas title insurance companies primarily focus on protecting buyers and lenders from potential defects in the title that may arise after the sale. They provide coverage for losses due to liens, claims, or damages related to the property title, which makes it vital for buyers to secure appropriate title insurance for their investments.
