Unmarketability is an ephemeral concept. Title is unmarketable if a reasonable buyer would reject it. Not everything that affects the title makes it unmarketable.
The case of Coons v. Carstensen 15 Mass.App.Ct. 431, 446 N.E.2d 114 (1983) is an excellent explanation of what marketable title is, and an even more informative discourse on how it is distinguished from clear record title. In Coons, Justice Kass posed the question, “Can an owner of land encumbered by a restrictive agreement deliver good and clear record title if public law imposes substantially similar limitations upon the manner in which the land may be used?” In this case, a public law imposed certain restrictions on property. However, in an apparent cooperative effort, the owners agreed to, and in fact gave to the town a restrictive covenant that confirmed the required restrictions, and this document was recorded at the registry of deeds. The court said that once the document was recorded the “record” title was blemished, even though (the court posited) the restrictions probably by themselves (based on the public law mandates) would not have rendered the title unmarketable:
Good and clear record title “rests on the record alone, which must show an indefeasible unencumbered estate.” O'Meara v. Gleason, 246 Mass. 136, 138, 140 N.E. 426 (1923). If extrinsic evidence, i.e., beyond the record, is required to support the title, it may be marketable, but it is not good and clear record title. See also Tramontozzi v. D'Amicis, 344 Mass. 514, 516 517, 183 N.E.2d 295 (1962); King v. Stephens, 9 Mass.App.Ct. 919, 920, 404 N.E.2d 115 (1980); Park, Real Estate Law §§951 & 953 (2d ed. 1981). It is the word “record” which gives the phrase “good and clear record title” distinct meaning in conveyancing. A “clear title,” unmodified by the word “record,” has the same connotation as “marketable title,” i.e., it “may be shown by oral or other evidence outside the record to be marketable beyond any reasonable doubt.” Cleval v. Sullivan, 258 Mass. 348, 351, 154 N.E. 920 (1927), quoting Morse v. Stober, 233 Mass. 223, 226, 123 N.E. 780 (1919).