Maine Real Estate License Practice Exam

What could create an unmarketable title?

1. An undischarged home equity loan

2. A mechanic's lien

3. Lis pendens

4. All of the above

The correct answer is: All of the above

An unmarketable title is one that contains defects that could jeopardize the holder's claim or ability to sell or transfer the property. Each of the items mentioned can contribute to this problem, highlighting why all the choices point towards this outcome. An undischarged home equity loan can create an encumbrance on the property, making it difficult for a new buyer to obtain clear title. This loan indicates that there is an existing lien against the property which has not been settled, and this could prevent a seller from transferring a clear and marketable title. Similarly, a mechanic's lien represents a claim made by a contractor or subcontractor against a property due to non-payment for work performed. This type of lien can also cloud the title, as it indicates that there are financial obligations tied to the property that must be resolved before it can be sold without potential legal complications. Lis pendens refers to a notice of a pending lawsuit affecting the property. This notifies potential buyers that there is ongoing litigation involving the title or property rights, thereby creating uncertainty about the ownership and status of the property. Such a notice can deter potential buyers, as it signifies legal issues that could affect their future interest in the property. When multiple claims, liens, or pending legal