<Table> <Tr> <Td> </Td> <Td> This article needs additional citations for verification . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed . (May 2015) (Learn how and when to remove this template message) </Td> </Tr> </Table> <Tr> <Td> </Td> <Td> This article needs additional citations for verification . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed . (May 2015) (Learn how and when to remove this template message) </Td> </Tr> <P> In United States property law, cloud on title or title defect 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 . According to Investopedia, a cloud can be defined as: "Any document, claim, unreleased lien or encumbrance that might invalidate or impair the title to real property or make the title doubtful . Clouds on title are usually discovered during a title search ." Clouded title can thus be contrasted with a clear title, which indicates that a property is unencumbered . </P> <P> A cloud on title may 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 . Some documents that affect title may be considered clouds, but nonetheless are unlikely to affect marketability or resale, such as with covenants, conditions and restrictions in a homeowner's association or subdivision . </P>

When does a cloud on a title occur