A “cloud” on the title means that there is a flaw in the ownership records related to your property, sometimes referred to as a break in the chain of title. Title researchers look back sixty years, or more if necessary, to a point in time where the person who owned the property held clear title. The researcher then examines each subsequent transfer of ownership to identify any break in the chain that might allow a third party to claim ownership.
Question: What are some common “clouds” on title?
A common example is when a mortgage holder, such as a bank, fails to record a release of lien when the mortgage is paid in full.
Another example, in some states a clouded title can result when a married person leaves property in his will to someone other than his spouse, without allowing sufficient other property for the spouse. If a decedent fails to provide for a spouse by will, then the surviving spouse may have a right to take an ‘elective share,’ which, in this example, means the spouse may have a right to claim all or part of a piece of property, even if the decedent bequeathed the property to another person.
If you are dealing with a more difficult situation, such as the first example, then it may be necessary to file an action in court to quiet title. An action to quiet title will probably take several months to complete, but is necessary to allow you to convey “good title”. Few buyers will want to purchase property while there is a third party who could claim ownership.