Escrow & Title
What is a 'cloud on title' in Louisiana real estate?
AA property with excellent title and no encumbrances
BAny claim, lien, or encumbrance that makes the title questionable or unmarketable✓ Correct
CA property listed at above-market value
DA title policy that has expired
Explanation
A cloud on title is any claim, lien, or encumbrance that raises doubt about the validity of the seller's title and makes it difficult to transfer marketable title to a buyer.
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Key Terms to Know
Encumbrance
Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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