What Is a Cloud On My Title?


 

Closing the sale

After months on the market, you finally found a buyer for your home.  The closing is just weeks away when the title company calls to tell you there is a cloud on your title.  What does it mean, and can you fix it in time for closing?

Quite simply, 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. Many title researchers look back forty to 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.

Past errors can result in a clouded title.  For 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.

A more 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.  A letter to the bank may be all that is needed for the bank to file a release of lien in due course.  (The bank may act faster if notified of your planned closing date.)

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.

For more information about removing a cloud from a title, contact a professional real estate attorney.  At Scolieri Law Group, P.C., our lawyers have represented commercial and residential brokers, agents, mortgage bankers, landlords, tenants, buyers and sellers.  We have the experience to assist you in all your real estate law needs.  Contact us today at (412)765-0546 or info@scolierilaw.com.