Definition
This contingency protects you by allowing you to cancel if the title search reveals defects that can't be cleared. It's essential for protecting against title problems.
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Title contingencies are essential for protecting buyers from inheriting liens, judgments, or other encumbrances on the property. The title company typically conducts a search and issues a preliminary title commitment showing any issues that need to be resolved. If the seller cannot clear title defects within the contingency period, the buyer can terminate the contract and receive their earnest money back.
Pro Tip
Always include a title contingency. It's your protection against liens and ownership disputes.
Example
The title contingency allowed the buyer 7 days to review the title commitment and request the seller to cure any title defects.