What is the difference between clear title and cloud on the title?

Clear title signifies that a property is free from any liens, encumbrances, claims, or disputes that could affect ownership. This means that the owner has the legal right to sell or transfer their property without concerns from creditors or other parties asserting a claim to it. A cloud on the title, on the other hand, refers to any claim, lien, or other issue that may create uncertainty regarding the true ownership or can impair the owner’s ability to sell or transfer the property. This can include anything from outstanding mortgages and unresolved disputes to issues stemming from boundary discrepancies. Thus, a clear title provides confidence in the ownership and rights associated with a property, while a cloud on the title introduces risks and potential challenges.