Understanding and Resolving Clouds on Title for Smooth Property Transactions
Cloud on title is a term that refers to an apparent encumbrance on real estate property. In most real estate transactions, obtaining title insurance is a vital step, which requires conducting a thorough title search. During this search, a researcher may discover issues that could impair or invalidate the transfer of title from seller to buyer. These issues represent the ‘cloud’ on the title.
Common Title Issues Uncovered in Search§
Typical problems identified during a title search include:
- Liens: Claims against the property for unpaid debts.
- Old Mortgages: Mortgages with no record of being paid off.
- Improper Previous Deeds: Deeds with errors or signed by unauthorized parties.
- Government Levies: Unresolved levies by a government agency.
Clearing Clouds on Title§
The seller must address these clouds before a sale can successfully proceed. Solutions include:
- Settling Liens and Levies: Paying off any debts or resolving claims against the property.
- Signing a Quitclaim Deed: Obtaining a quitclaim deed to clear up ownership rights issues.
- Filing for a Quiet Title: This legal process serves to establish the rightful owner and clear any disputes.
In some cases, these steps may delay the sale beyond the timeframe stipulated in the sales and purchase agreement. However, clearing the clouds on title is crucial for ensuring a legitimate and uncontested transfer of property to the new owner.
Related Terms: title search, title insurance, quitclaim deed, quiet deed, property liens.