The Standards for Examination of Real Estate Titles in Arkansas, or "title standards" for short, have been published since 1995, with the most recent and fourth edition being published just this past week. Attorneys frequently rely on title standards when conducting title examination for their clients. Each state where I practice oil and gas law, including Arkansas, publishes a set of title examination standards. These title standards are not only used by title examiners for oil and gas interests, however. Arkansas real estate lawyers, title insurers, and mortgage lenders frequently consult the title standards as a guide to determine whether a particular tract of land has marketable title.
As the chair of the title standards committee, I am glad to say that the latest edition of this comprehensive guide came to fruition from the hard work of several real estate and oil and gas lawyers from all over the state. Once again, the committee, and the entire bar association has published a product that it can be very proud of. The most recent publication of the title standards will be featured for sale at the 52nd Annual Natural Resources Law Institute in Hot Springs, Arkansas in just a few days time. If you have not registered for the event, there is still time, and, unlike your hair place, walk-ins at the institute are certainly welcome.
To summarize, the Arkansas title standards are a guide used to assist the title examiner who is charged with determining whether a property owner has a marketable or unmarketable title. According to Standard 1.1 of the title standards:
[M]arketable title is a title free from reasonable doubt both as to matters of law and fact, a title which a reasonable purchaser, well informed as to the facts and their legal bearings and willing and ready to perform the contract, would, in the exercise of that prudence which business persons ordinarily bring to bear upon such transactions, be willing to accept and ought to accept. 3 Am. L. Prop. § 11.48 (A. James Casner et al. eds. 1952). A marketable title is "not only a title that [a purchaser] can hold against all adverse comers, but one that he can hold without reasonable apprehension of it being assailed, and one that he can readily transfer, if he desires, in the market." Tupy v. Kocourek, 66 Ark. 433, 51 S.W. 69 (1899). See also Baugh v. Johnson, 6 Ark. App. 308, 641 S.W.2d 730 (1982).
In other words, a marketable title is one that is essentially risk-free. One simply should not be expected to purchase a tract of land that also includes the high probability of an expensive lawsuit.
I would encourage practitioners and all others that are interested in Arkansas real estate or Arkansas oil and gas law to acquire a copy of the most recent title standards. If you can not make it to Hot Springs for the institute next week, a copy can be purchased directly from the Arkansas Bar Association.