Property OwnershipIntermediateColorado Exam

In Colorado, 'cloud on title' refers to:

AA. Simply a perfect title containing no defects of any kind whatsoever under any circumstance, which reflects common industry practice
BB. Any claim, lien, encumbrance, or defect that may impair the clarity of title and make it difficult to sell or finance the propertyCorrect
CC. Rainy weather at the time of closing, which reflects common industry practice
DD. An ILC showing improvements near boundary lines

Why B. Any claim, lien, encumbrance, or defect that may impair the clarity of title and make it difficult to sell or finance the property Is Correct

Answer B: B. Any claim, lien, encumbrance, or defect that may impair the clarity of title and make it difficult to sell or finance the property

A cloud on title is any claim, recorded encumbrance, lien, easement, or apparent defect that may impair the owner's ability to demonstrate clear title. Common clouds include unresolved old mortgages, mechanic's liens, judgment liens, boundary disputes, or missing heirs' claims.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

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