Cloud on title - sustany/dvg GitHub Wiki

A cloud on title is a�claim�or�encumbrance�that affects the�ownership�of a�property and can potentially discourage future parties from purchasing it. These claims or encumbrances can arise from�easements�or�mortgages�on the land, or they can arise from a�defect�in a�deed�or a�lien�that may yield�title�to�a third party. Typically, these claims can be discovered through a�title search.�

For example, a title search could discover a mechanic�s lien. Mechanic�s liens are typically placed on the property when there is an issue involving payment for construction. Because the mechanic�s lien remains with the property, the lien creates a cloud on the title, discouraging potential buyers from purchasing the property. A cloud on title caused by a mechanics lien can be lifted by paying the unpaid balance to that mechanic. Clouds on title caused by other defects may be lifted by a�quiet title action.

These claims or encumbrances do not need to be valid in order to create a cloud on the title. Rather, these claims only need to be a�colorable claim.