Dealing with Cloud on Title: What Homeowners Need to Know

Your home is your most valuable possession. The idea of your ownership coming into question would be alarming. Maybe you’ve heard about clouded titles but aren’t sure what that means for ownership. This post will explore what a cloud on title is and what homeowners can do about it.

The Basics of Cloud on Title for Homeowners

This refers to any issue or claim that creates uncertainty about a property’s legal ownership, which can cause problems with transferring the title. Clouds on a title may arise from unpaid debts, disputes over ownership, errors in public records, or fraudulent activity. They can complicate real estate transactions and create legal and financial liabilities for a property owner.

Now that you know the basics of a cloud on title, let’s examine some common issues.

Common Title Cloud Issues

A title cloud can result from several issues varying in severity and complexity. However, they can all cloud ownership or result in problems with transferring the title.

Liens are the most common issues leading to a clouded title. Mortgage liens and foreclosures can be a problem. Other unpaid debts where the owner used the property as collateral can also result in a clouded title. Mechanic’s liens and judgment liens are other potential issues.

Another major concern is an unclear or broken chain of title. The chain of title is a record of all ownership transfers in the property’s history. Issues like this can result from missing records or filing paperwork improperly.

Probate and inheritance disputes may arise if a previous owner dies. Additionally, title fraud and forged deeds could cause this issue in a title.

Discovering a Cloud on the Title

What can you do if you believe your title might have a cloud? You could search public records, but this might be difficult if you don’t know what to look for. Hiring a title company to perform a title search will be more thorough. These professionals review records to verify ownership history and uncover potential issues, such as liens, disputes, and paperwork errors.

Steps You Can Take

Once you’ve identified a title cloud, develop a plan to address it. Gather all relevant documents, like deeds, contracts, title reports, and mortgage paperwork. Then determine the correct action for the specific issue. For example, paying off debts or negotiating a settlement can help you address liens. Filing a corrective deed is an option for errors in ownership records.

It is important to note that resolving a cloud on title is typically a complex issue. Property owners should seek advice from an experienced real estate attorney. They can determine the correct solution for the given issue. An attorney can also file paperwork properly or negotiate settlements on your behalf.

Do you need a title search or help addressing an issue with your title? Click here to contact First National Title & Escrow. Reach out now to learn more about how we can help.

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