Legal Definitions - cloud on title (cloud)

A cloud on title, also known as a cloud, is a claim on the ownership of a property that is either real or apparent. It can be an old mortgage or deed of trust that was not recorded properly, a failure to transfer all interests in the property to a former owner, an improperly written or signed previous deed, an unresolved legal debt or levy by a creditor or a taxing authority, or some other doubtful link in the chain of title.

For example, if a person sells a property to another person but forgets to transfer the mineral rights to the new owner, it creates a cloud on the title. The new owner may not have complete ownership of the property until the mineral rights are transferred.

Another example is if a previous owner had a mortgage on the property, but the mortgage was not recorded properly, and the debt was not paid off. This creates a cloud on the title, and the new owner may not have clear ownership of the property until the debt is paid off or the cloud is removed through a quiet title action.

To remove a cloud on title, a quiet title action may be necessary, or a person may need to create or execute a document to prove that a debt has been paid or corrected. Title companies will not insure title to be transferred with a cloud, or they will insure ownership except for the cloud.