What Is A Cloud On Title?

A cloud on title is any title defect that can prevent the legal transfer of the ownership of a property from a seller to a buyer.   

Common clouds on title are: 

• Liens
• Clerical or filing errors
• Unknown heirs
• An incorrect official property descriptions
• Encroachments or easements
• Ownership disputes
• Fraud

These clouds are usually discovered during a property title search.  A title company will examine the deed, search for tax liens, review land records, and determine if there are any outstanding court judgments. This is where a cloud on title will show up. And if one does, don’t worry.  

You can get a cloud on the title removed, and many times it is easy.  It just depends on the type of cloud you have. For example, in the case of liens, the lien just needs to be paid in full.  

Other ways to resolve a cloud on a title are:

• File the proper documents if the issue is from a clerical error
• Quitclaim deed
• Quiet title
• File a lawsuit

However, the best way to resolve a cloud on title is avoiding one altogether.  The easiest way to avoid a clouded title is staying current on all of your payments, especially your mortgage and taxes.  Another option is to purchase title insurance. If any issues are discovered with the title, your title insurance policy helps pay for the legal fees to resolve the issue.  It’s also important to verify that all information and descriptions on your property’s title are correct, any easements are recorded, and that there are no liens filed against your property..  

Clouds on title are just unresolved issues that appear on a property’s title. They are nothing to worry about.  And now you know how to find a cloud on title and resolve it making your home buying and selling process go smoothly.