Imperfect Title versus No Title

A seller who cannot give a clean title may have a flawed interest or none at all, and the difference matters for what the buyer can do. An imperfect title means the seller has some interest, but incomplete, encumbered or doubtful; often the defect can be cured. No title means the seller has no interest to convey at all; the sale usually cannot be saved. Both fall within Sections 13 and 17. This note explains each in its own right, compares them, and works through an example.

Figure: Imperfect title against no title, a flawed interest against no interest at all

1. Imperfect Title in Its Own Right

An imperfect title means the seller has some interest in the property, but a flawed one: incomplete, encumbered, or open to reasonable doubt. Because there is an interest that can often be perfected, the buyer's rights under Section 13 come into play: he may compel the seller to make good the contract out of an interest later acquired, to procure the concurrence of others, or to redeem a mortgage, so that a clear title can be conveyed. Under Section 17, such a seller cannot compel a buyer to accept a title not free from reasonable doubt; but the sale can frequently be saved by curing the defect.

2. No Title in Its Own Right

No title means the seller has no interest at all to convey; he is, as to the property, a stranger. A purported sale by one who never owned the property is the type case. There is nothing for the seller to make good, so the sale usually cannot be saved; the buyer's real protection is the return of his deposit, with interest, costs and a lien on the seller's interest under Section 13(1)(d), where the seller sues and fails for want of title. Under Section 17, a seller who knows he has no title cannot compel a buyer to take from him.

3. The Two Compared

4. A Flawed Interest against No Interest

5. A Worked Example

Suppose a seller agrees to sell a house that is subject to a subsisting mortgage he can pay off. His title is imperfect, but the defect is curable: under Section 13 the buyer may compel him to redeem the mortgage and convey a clear title, so the sale is saved. Now suppose the seller never owned the house at all and had no authority to sell it. He has no title: there is nothing to perfect and nothing to convey, so the sale cannot be saved. The buyer's protection is to recover his deposit with interest and a lien under Section 13(1)(d) if the seller sued and failed for want of title, and, under Section 17, the seller could never have compelled the buyer to complete. The curable flaw is mended; the total want of title is met by a refund.

6. Frequently Asked Questions

Q. What is the difference between an imperfect title and no title?
A. An imperfect title means the seller has some flawed or encumbered interest, often curable; no title means the seller has no interest at all to convey, so the sale usually cannot be saved.

Q. What can a buyer do where the seller's title is imperfect?
A. Under Section 13, he may compel the seller to perfect the title, procure the concurrence of others, or redeem a mortgage, so that a clear title can be conveyed.

Q. What is the buyer's remedy where the seller has no title?
A. The return of his deposit, with interest, costs and a lien on the seller's interest under Section 13(1)(d), because there is nothing for the seller to convey.

Q. Does Section 17 apply to both?
A. Yes. A seller who knows he has no title, or who cannot give a title free from reasonable doubt, cannot compel a buyer to take from him under Section 17.