What does a Defect in Title refer to?

A Defect in Title refers to any lien, claim, or encumbrance properly recorded against a property. When a property is sold, the title must be free from defects to ensure that the new owner can enjoy the title without legal disputes. A defect in title occurs when there are issues that might affect the ownership rights, such as liens that have not been cleared, unresolved claims, or encumbrances like easements that limit the property’s use.

Understanding the implications of defects in title is crucial in real estate transactions, as these issues can lead to significant legal and financial consequences for buyers. When a property has a defect in title, it means there is a recorded issue that must be addressed before the title can be considered clear and marketable. This contrasts with the other choices, which include aspects like missing documents or unrecorded claims, which may also complicate property transfer but do not specifically capture the essence of a defect in title as recognized in real estate law.