What does a marketable title guarantee to its owner?

A marketable title guarantees that the title is free of material defects, which means that it has no significant issues that would affect its validity or value. This assurance is crucial for buyers and lenders because it provides confidence that the property can be sold or refinanced without encountering legal problems. A marketable title must have the capacity to stand up to scrutiny and be upheld in a court of law, ensuring that the owner can exercise their rights over the property without the fear of claims from others that could arise from defects or disputes.

In contrast, while a title exposed to litigation could imply some defects or uncertainties about ownership, it would not be considered marketable. The assurance of free material defects directly supports the expectations of clear ownership and the ability to transact effectively. The other options revolve around concepts that can either lead to liabilities or conditions not typical of a marketable title. For example, guaranteeing future income or indicating unrestricted transfer rights does not address the core requirement of a title being devoid of defects necessary for marketability.