The Causes & Effects of "Clouds" on Title

 One key step in the buying and selling of real estate is the transfer of real estate. After all, after buying or selling a home, you'd expect to be given or removed from ownership rights to the property, correct? Well, unfortunately sometimes there are issues that arise that cause issues or "title defects." These defects are referred to as a "cloud on title." Your premier title company at the Lake of the Ozarks is here today to tell you all about "clouds" and how you can mitigate and rectify them

What is a "Cloud" on Title?

The term "cloud" is synonymous with "title defect," referring to any issues with a title that may cause reasonable buyers to become hesitant to purchase the property. A "cloud on title" is any item that could compromise or cast doubt on the validity of the title. Here are some examples of items that could cause a "cloud on title:"

  • Any outstanding lien or encumbrance
  • Recording errors
  • A pending lawsuit over homeownership rights
  • An unsatisfied mortgage lien
  • Unpaid property taxes

What Affects does it Have on Property Ownership?

Having a "cloud on title" is a huge deterrent for buyers to purchase the property. Once title defects are discovered, potential buyers may choose to walk and let the contract expire, as unresolved title defects can sometimes have huge financial implications. However, they can also be simple fixes as well. It's always best to have a professional title company at the Lake of the Ozarks conduct title searches to uncover any of these potential issues early. 

How to Clear Clouds

When a "cloud" is discovered on the title, it's best practice to work at resolving whatever issues have arisen. Sometimes the issues can be resolved relatively easily, for example, needing to collect a missed signature or paying off a small lien that was overlooked. However, some issues are more complex and require more time and diligence to undo. This can lead to filing a "quiet title" action, a lawsuit that is intended to settle the title issue. Once the court has cleared the ownership issue and other claims have been satisfied, the property can be sold.

When buying and selling real estate at the Lake of the Ozarks, obtaining a title report can quickly determine if there are any issues with the title, BEFORE you get close to the closing table. It's best to find these issues out as early as possible to give ample time to resolve any that arise or to at least gain the peace of mind that nothing should prevent the purchase or sale of your home. If you're ready to buy or sell at the Lake and would like a title report on a piece of property, the best title company at the Lake of the Ozarks would be happy to help! 

The Lake of the Ozarks' Most Trusted Title Company

Where Accuracy Matters!

750 Bagnell Dam Blvd Suite B
Lake Ozark, M


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