A quick definition of nonmerchantable title:

A title is the legal right to control and dispose of property. It shows evidence of a person's ownership rights in property, like a deed. There are different types of titles, like clear title, which means there are no encumbrances or limitations on the property, and defective title, which means there is a conflicting claim to the property. A nonmerchantable title is a title that a reasonable buyer would refuse to accept because of possible conflicting interests or litigation over the property. Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employment discrimination and harassment on the basis of race, sex, pregnancy, religion, and national origin.