Escrow & Title

A 'cloud on title' is best described as:

AAny outstanding mortgage on the property
BA claim, lien, or encumbrance that may impair the owner's clear title✓ Correct
CThe difference between assessed value and market value
DAn expired easement that no longer affects the property

Explanation

A cloud on title is any claim, lien, encumbrance, or question about the title that may impair the owner's ability to convey clear title. Clouds can include unsatisfied judgments, unreleased mortgages, disputed boundary lines, and forged deeds. They must typically be resolved before a transaction can close.

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