DEFINITION of 'Cloud On Title'

Any document, claim, unreleased lien or encumbrance that might invalidate or impair the title to real property or make the title doubtful. Clouds on title are usually discovered during a title search. Clouds on title are resolved through initiating a quitclaim deed or a commencement of action to quiet title.

BREAKING DOWN 'Cloud On Title'

A title search and title insurance are generally required by lenders as protection from any third-party claims, or clouds on title, to property that is used as collateral. Title searches and title insurance are required in the mortgage origination process.

RELATED TERMS
  1. Clear Title

    Also known as "clean title," "just title," "good title" and "free ...
  2. Quiet Title

    A lawsuit filed to establish ownership of real estate when ownership ...
  3. Absolute Title

    Title to a property that is free of any encumbrances or deficiencies. ...
  4. Certificate Of Title

    A state or municipal-issued document that identifies the owner ...
  5. Opinion Of Title

    A legal opinion attesting to the validity of the title deed to ...
  6. Bad Title

    A title that does not grant ownership to its holder due to unsatisfied ...
Related Articles
  1. Insurance

    How to Decide if Title Insurance Is Worth the Cost

    Most people don't understand the critical role title insurance plays when buying a home.
  2. Personal Finance

    Car Title Loan Requirements

    Here's a list of what you need to qualify for a car title loan. Most important: having sole ownership of your car with no liens.
  3. Investing

    Five Things To Know About Quitclaim Deeds

    General warranty deeds provide the buyer with the most protection; quitclaim deeds provide the least.
  4. Personal Finance

    States That Allow Car Title Loans

    Only some states permit car title loans – and those that do may have restrictions. Check this list to see what to expect.
  5. Personal Finance

    How to Sell a Car With a Lien

    Vehicle owners wondering how to sell a car with a lien on the certificate of title have four options to both remove the lien holder and transfer ownership.
  6. Managing Wealth

    Tips For Transferring A House Title

    Transferring a house title can be complicated at times. Here are some guidelines to help you get through the process.
  7. Insurance

    Encumbrances And Nonpossessory Interests In Real Property

    Learn about nonpossessory interests and the various forms of encumbrances.
  8. Investing

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
  9. Personal Finance

    Title Loans vs. Payday Loans: Which Are Better?

    Both title loans and payday loans carry risks that outweigh the benefits.
  10. Investing

    What's a Special Warranty Deed?

    A special warranty deed is a deed in which the seller guarantees the title only against defects that occurred during his ownership of the property.
RELATED FAQS
  1. What type of work experience can count towards the work experience required in order ...

    CFA Institute provides a list of job titles that qualify for the work experience an individual must gain to be awarded with ... Read Answer >>
Trading Center