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Looking For A Cloud In The Title Before You Buy

By Mary Barney

In real estate lingo, a cloud on a title represents caveat emptor as interpreted from Latin. It warns that even though the deed has been recorded, a buyer should proceed carefully because there is something unusual about the deed that calls for closer inspection. A buyer oftentimes has the option to back out of a contract when there is a cloud on a title and eliminating it is very simple, requiring evidence via a document that a debt has either been paid or corrected.

A cloud on a title can mean several things, but is generally considered a title defect of some sort. It can be as easy as wrong spellings of a property’s address in a deed conveying title, or it can signify a mortgage lien whose settlement may have been made but not officially recorded. It can also show a failure to convey certain property rights (such as mineral rights) to the former proprietor of a property or some other questionable link in the succession of title.

Title companies will refuse to insure any title to be transferred with a cloud, but they do sometimes insure ownership of a property around the cloud. The owner of the property can easily remove the cloud on the title by initiating a quitclaim deed or via a quiet title proceeding. A document is necessary in order to remove a cloud from a title that confirms the debt or error associated with the title has been corrected.

Usually trivial, the problems concerning a cloud on a title in most cases are easily remedied. Sometimes, however, clouds on titles can be a bit more complicated when a property is acquired using a mortgage. The mortgage company must inform the local record office of paid liens whenever a mortgage has been completely paid. If this does not happen, and if the owner attempts to sell the property, the procedure becomes clogged as the official documentation search indicates that the property is still under a mortgage. Amending the error as soon as possible must be a topmost priority.

In summation, clouds on titles are oftentimes simple errors that are easily remedied with the filing of appropriate documents with the local records office. Upon receipt and approval of the correct documents by the local records office, the deed is considered complete and the cloud on the title officially removed.

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Article Citation
MLA Style Citation:
Barney, Mary "Looking For A Cloud In The Title Before You Buy." Looking For A Cloud In The Title Before You Buy. 7 Oct. 2010. uberarticles.com. 27 Jul 2014 <http://uberarticles.com/real-estate/looking-for-a-cloud-in-the-title-before-you-buy/>.

APA Style Citation:
Barney, M (2010, October 7). Looking For A Cloud In The Title Before You Buy. Retrieved July 27, 2014, from http://uberarticles.com/real-estate/looking-for-a-cloud-in-the-title-before-you-buy/

Chicago Style Citation:
Barney, Mary "Looking For A Cloud In The Title Before You Buy" uberarticles.com. http://uberarticles.com/real-estate/looking-for-a-cloud-in-the-title-before-you-buy/


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