Cloud

Definition

A cloud refers to a defect or encumbrance in the title of real estate or property, complicating its sale or transfer.

Purpose

The purpose of identifying a cloud on a title is to address and resolve any legal issues or claims that could interfere with the ownership or transfer of the property.

Examples of Use

• A property might have a cloud due to an unresolved lien or legal dispute.
• Before selling a property, owners often conduct a title search to identify and clear any clouds.

Related Terms

• Title Search: An examination of public records to determine the legal ownership of property and identify any clouds.
• Lien: A legal claim against a property, often for unpaid debts.
• Escrow: A financial arrangement where a third party holds funds or property until conditions are met.

Notes

Resolving clouds on a title often requires legal action or negotiation to clear encumbrances and ensure a clean transfer of ownership.