A buyer agreed to purchase a parcel of land from a seller. During a title search, the buyer found a recorded easement granting a neighbor access to a driveway on the property. The buyer claimed the easement made the title unmarketable and refused to proceed with the transaction. The seller argued the easement was recorded, disclosed before the contract was signed, and consistent with expected property use. How should the court rule?
The court should rule in favor of the buyer because the easement restricts the buyer's ability to make changes to the property.
The court should rule in favor of the buyer because easements that limit potential uses of the property can make a title unmarketable.
The court should rule in favor of the seller because the recorded easement was available for the buyer to review during the title search process.
The court should rule in favor of the seller because a recorded easement that aligns with standard property use does not render the title unmarketable.
The court should generally find in favor of the seller. Marketable title refers to ownership that is free of substantial defects or risks of litigation. A recorded and disclosed easement that does not materially interfere with ordinary property use is typically expected in real estate transactions and does not render a title unmarketable. The incorrect answers misunderstand when an encumbrance, like an easement, impacts marketability or fail to account for legal standards related to disclosed, recorded encumbrances.
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