Cloud on title

The term cloud on title refers to any irregularity in the chain of title of property (usually real property) that would give a reasonable person pause before accepting a conveyance of title. A cloud on title reduces the value and marketability of property because any prospective buyer aware of the cloud will know that they are buying the risk the grantor may not be able to convey good title. Often, the discovery of a cloud on title will provide the grantee a reason to back out of a contract for the sale of real property.