Cloud on title,

Definition of Cloud on title:

1. A cloud on title is any document, claim, unreleased lien, or encumbrance that might invalidate or impair a title to real property or make the title doubtful. Clouds on the title are usually discovered during a title search. Clouds on the title are resolved by initiating a quitclaim deed, which releases a person's interest in a property without stating the nature of the person's interests.

2. Objection on public record (such as a lis pendens) or a potential defect (such as failure to register a deed) in the title to an asset or property that may hinder or prevent its conveyance, and therefore its sale or pledge for a loan.

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

How to use Cloud on title in a sentence?

1. A cloud on title is any encumbrance that puts a title to real property into question.
2. Clouds on the title are resolved through a quitclaim deed.
3. Examples of encumbrances are foreclosure proceedings, liens on a property, probate, or fraudulent titles.