Escrow & Title
What is a 'cloud on title'?
AEnvironmental contamination near the property
BAny outstanding claim, lien, or encumbrance that affects the quality of title and may prevent clear transfer✓ Correct
CA dispute about property boundaries
DPending litigation about property rights
Explanation
A cloud on title is any claim, lien, or encumbrance appearing in the title record that may be valid or invalid but casts doubt on the owner's clear title. Clouds must be removed (by paying off liens, getting releases, or pursuing a quiet title action) before or at closing.
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