“Cloud on the title” also known as “title defect”, is generally caused by a claim, lien, or encumbrance impairing or blocking your rights as a real property owner.
Generally, “clouds” prevent property owners from selling, conveying, or transferring a marketable title. Another example of a “cloud” is a notice of pendency of action or “lis pendens”, which is a document that is recorded with the county which provides constructive notice of a pending court action affecting the title or possession of real property. If there is a dispute that deals with real property, this notice, which is also filed with the court, warns all potential acquirers or purchasers against any attempt to acquire a legal or equitable interest in the real property. This provisional remedy is a powerful weapon a plaintiff has when filing an action that affects title or possession of real property.