New York Law (NYLE) Practice Exam

Which of the following does NOT render the title to real property generally unmarketable?

1. A mortgage

2. A beneficial easement

3. A restrictive covenant

4. A significant encroachment

The correct answer is: A beneficial easement

A beneficial easement does not typically render the title to real property unmarketable because it grants certain rights to use the property for a specific purpose, usually enhancing its value or usability. Easements are common in real estate and are often accepted as part of the property’s character. Potential buyers generally anticipate the existence of easements and can assess how they affect property usage and enjoyment; thus, they usually do not impede the marketability of the title. In contrast, mortgages, restrictive covenants, and significant encroachments can create legal complications that may deter potential buyers. Mortgages represent a lien on the property, which must be satisfied before the title can be transferred, potentially making the title unmarketable until resolved. Restrictive covenants may impose limitations on how the property can be used, which some buyers might find undesirable, impacting the property’s appeal. Significant encroachments can lead to disputes over property boundaries and can create legal challenges that would render a title unmarketable until the issues are resolved.