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Cloud on Title

Definition - What does Cloud on Title mean?

A cloud on title is any potential outstanding claim on a piece of real property that could put the existing title into question and possibly invalidate complete ownership. Clouds on title can present hazards to people who are trying to sell their real property or to use it as collateral for a loan.

Justipedia explains Cloud on Title

An example of a cloud on title could be a document that reveals that the rights to harvest a piece of land were leased to a farming company ten years in the past. In this circumstance, the owner of the land may not have known this when the land was purchased. However, the fact that the rights to harvest the land have been leased out may effect the validity of the title, or the man's complete ownership of the land. This could create problems if the man tried to sell the land or use it as collateral for a loan. There are, however, ways to resolve issues of cloud on titles.

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