Posted by Anonymous
There are multiple reasons for real estate title to be considered "Clouded." Other, and more technical terminology for clouded title is that the title is encumbered. What this means is that there is a lien, liability or charge on the land. A lien is a claim to property or some amount of money by a creditor because of a debt belonging to the owner of the property. Most often we hear about clouded title issues when there is a mortgage on the property.
Clouded title issues may involve Federal, State or local tax liens, liens for work done on the property, missing heirs with possible claims on the property, boundary or survey disputes or other claims of ownership.
Before buying a home a thorough title check should be made in order to guarantee that there are no title issues. An attorney can be hired to do this, but a title company or searcher is usually hired during escrow to investigate any potential problems with title. Often when buying a home there is a mortgage on the property and it is very common for the proceeds of the sale to pay off the existing mortgage. Therefore this type of clouded title is not typically considered a deal breaker. If there is some sort of lien, easement or ownership claim that is not easily cleared up the sale may be abandoned.