CaseCast™ – "What you need to know"
Brief Fact Summary. The Plaintiff, Mr. Lohmeyer (Plaintiff), brought suit to rescind contract to buy land after he discovered the structure on the land was in violation of a city ordinance.
Synopsis of Rule of Law. A marketable title to real estate is one, which is free from reasonable doubt and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation.
Municipal ordinances relating to the use of land or the location and character of buildings that may be located thereon in existence at the time of the execution of a contract for the purchase of real estate are not such encumbrances or burdens on title as may be availed of by a vendee to avoid the agreement on the ground they render his title unmarketable.View Full Point of Law
Issue. Whether the property in question is subject to encumbrances or other burdens making the title unmerchantable.
Held. Reversed. A violation of a city ordinance as well as the other violations makes this title unmarketable and doubtful.
A marketable title to real estate is one, which is free from reasonable doubt and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation.
The defect which the purchaser complains must be of a substantial character and one from which he may suffer injury.
Discussion. The court analyzed what type of encumbrances or issues would render a title to real estate unmerchantable and allow a buyer to rescind the purchase contract. The court noted that the Plaintiff was correct in basing his case on current violations and not restrictions contained in the deed. Public ordinances and zoning are not restrictions that make a title unmarketable. They only do so, when the property in question is already in violation of them.