A cloud on title is any recorded document or claim that raises a question about who actually owns a property free and clear, such as an old lien that was never released, a missing heir's signature, or a deed with an error in it. A title company will not insure a sale until the cloud is resolved, whether that means paying off a debt, tracking down a signature, or a court order.
Why it matters
A cloud on title can stall or kill a closing until it is cleared, no matter how ready the buyer is to sign.
General information, not legal or tax advice.