Property Title “Clouds” in California

What Does It Mean if My Property Title Has a “Cloud?”

If you have a “cloud” on your property title, the property has an outstanding lien or unresolved issue that could lead to its confiscation for payment. Common types of clouds on titles include:

• Liens from a mechanic, bank, healthcare, etc.
• Easements
• Probate issues (Wills)
• Boundary disputes

Many of these issues can go unnoticed for years, only coming up during a title search. Given that title searches typically only take place during the buying and selling process, clouds on titles often cause complications for property owners and prospective buyers.

Should I Be Concerned if I Find a Cloud on My Title During the Selling Process?

Generally, yes. People looking to buy are generally weary of purchasing a property with a cloud on the title, given that this can invalidate the owner’s right of ownership over the property. Laws may prevent you from selling the home until the title issue is resolved, depending on the type of cloud.

How Can I Get a Cloud Title Removed From My Property?

Luckily, property owners can often resolve many types of title clouds through a “quiet title action.” This is basically when a property owner presents the title to a court, who decide who must resolve the title. The information one would submit includes:

• A description of the property that is the subject of the action. This must include both the legal description and the street address or common designation, if any.
• The title of the plaintiff as to which a determination of quiet title is sought. If the complaint is based on adverse possession, the complaint must allege the specific facts constituting the adverse possession.
• The adverse claims to plaintiff’s title.
• The complaint must include the date for the sought determination. If it’s different from the filing date, the complaint must explain why that specific date is requested.
• A prayer for the determination of plaintiff’s title against the adverse claims.

Possible Consequences of Having an Encumbrance On a Title

Having a cloud on your title can have significant legal and financial consequences. When attempting to sell or mortgage a property, financial institutions and buyers will require proof of “clean” title. If the restriction is not removed, the transaction may be delayed or canceled altogether. In addition, even after purchasing a cloud property, a buyer may face restrictions on the use or possession of the property. If you are trying to:

• attract investment
• obtain a loan secured by real estate
• register a title

the presence of the cloud may make these actions more difficult. Some types of restrictions, such as pending probate cases, may be difficult to resolve. You will need professional legal assistance.

Checking Title History

To prevent such situations, it is important to conduct a thorough title search. This is done before you buy or sell a property. This includes obtaining a title report. This reflects any recorded restrictions and potential risks. Such a report helps to identify problems in advance and take corrective action.

In addition, the inspection should be done not only at the time of the sale of the property. But also on a regular basis, especially if you inherit the property. Or became the owner as a result of divorce proceedings. It is also worth remembering that some encumbrances, such as oral agreements on the right of use. may not be recorded in the official records and require separate legal consideration.

Why It is Important to Seek Legal Advice

Timely consultation with an attorney will not only allow you to determine the nature of the encumbrance, but also to develop a strategy for eliminating it. Depending on the situation, this may involve

• the filing of a lawsuit to establish rights
• the procedure of cancelling an unlawful record
• appeal to the court in inheritance matters
• resolving a dispute with neighbors

Regardless of the nature of the problem, a qualified attorney will help reduce the risks and protect your interests. KAASS LAW offers professional legal assistance. Our attorneys can help:

• determine the cause of the problem
• represent your interests in court
• provide a “clean” registration of rights to real estate

Glendale Real Estate Attorney

Be aware that a quiet title action is different than removing a cloud title, which may be necessary to completely void the record of the cloud on your title depending on the type of cloud it is. Consult a real estate attorney to determine if a quiet title action can resolve your title issue or if cancellation is necessary. We invite you to contact our Glendale real estate attorney today at (310) 943-1171 for a free consultation. We can assist with resolving clouds on your property title through effective legal strategies.