Which of the following would typically be a title defect?

An undisclosed prior lien on the property is considered a title defect because it represents a claim or liability that has not been revealed or recorded, thus potentially affecting the ownership rights of the property. If a property has an undisclosed lien, it can create significant issues for the current owner, as this lien could become enforceable against the property, jeopardizing the owner's ability to sell or refinance it. This situation highlights the importance of a thorough title search before property transactions, ensuring that all liens and claims against the property are disclosed and resolved.

In contrast, a recorded mortgage that has been fully paid does not represent a title defect, as it has no effect on the property once it is satisfied. An outdated property tax record might cause confusion but does not inherently impact ownership rights or create a cloud on the title. Similarly, a newly constructed building on the property typically indicates a valid improvement and does not constitute a defect; rather, it could enhance the property’s value or use. Thus, the presence of an undisclosed prior lien is what makes it a clear title defect, requiring attention to resolve the uncertainty surrounding ownership.