Cloud on title

The term cloud on title refers to a deed (title to real property) which has been recorded but includes an unusual characteristic that would give a reasonable person pause before accepting title. Often, the presence of a cloud on title provides the grantee the option to back out of a contract. Examples of cloud on title can include a property's address being misspelled in a deed conveying title, a mortgage lien whose repayment hasn't been officially recorded, a deed which has been signed but hasn't been properly recorded, or a failure to transfer property rights (such as mineral rights) to a former owner of the property. A cloud on title is generally considered synonymous with a title defect.