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Warning
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Simple English definitions for legal terms
cloud on title
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A quick definition of cloud on title:
A cloud on title is a problem that can make it hard to sell a property. It happens when someone else has a claim on the property, like a bank that lent money for a mortgage or a person who did work on the property and wasn't paid. Even if the claim isn't true, it can still cause trouble. To fix it, you might need to pay the person who made the claim or go to court to prove that you own the property.
A more thorough explanation:
A cloud on title is a problem that affects the ownership of a property. It can make it difficult for someone to sell or buy the property. This problem can come from different sources, such as:
- Easements or mortgages on the land
- Defects in the deed
- Liens that may give title to a third party
For example, let's say that a mechanic worked on a property but was not paid. The mechanic can put a lien on the property, which means that they have a right to be paid from the sale of the property. This lien creates a cloud on the title because it makes it harder for someone to buy the property. The same can happen if there is a defect in the deed or if someone else claims ownership of the property.
To find out if there is a cloud on the title, a title search can be done. This search will look for any problems that may affect the ownership of the property. If a cloud on the title is found, it can be lifted by paying the unpaid balance to the mechanic or by doing a quiet title action.
It's important to note that a cloud on the title does not have to be valid to cause a problem. It only needs to be a colorable claim, which means that it has the appearance of being valid.
Overall, a cloud on title is a problem that can make it difficult to sell or buy a property. It's important to do a title search to find any potential problems and to take steps to lift any clouds on the title.