What distinguishes a marketable title from a clouded title?

A marketable title is characterized by its clarity and absence of defects that could hinder its transferability. This means the title is free of claims, liens, or any legal questions about its ownership, making it appealing for buyers and lenders. On the other hand, a clouded title contains potential issues such as unresolved claims, disputes, or errors in public records that can complicate or restrict the sale and transfer process.

The significance of the distinction lies in the fact that a marketable title ensures that the property can be sold or mortgaged without facing legal challenges or uncertainties, which benefits the buyer and any future transactions involving the property. In contrast, a clouded title may discourage potential buyers and can lead to complications in real estate transactions, making it less desirable.

Other options do not accurately describe the nature of marketable and clouded titles: the cost comparison is irrelevant to the title's status, ownership by an individual is not a defining factor of marketable titles, and historical significance does not pertain to the title's marketability.