Remove Title Clouds Before They Dampen Your Home Sale

When a property is sold, the owner must supply the buyer with a good and marketable title to the property-one free of any liens or judgments. Homes with liens or judgments are considered to have "clouds" on the title.

Several types of liens can be placed on a property, including:

This is a lien from a contractor, subcontractor, even a supplier of materials to a job, who has not been paid for work performed. New-home buyers should be sure to obtain a "release of lien" form signed by all subcontractors and suppliers before making the final payment to the builder.

In some divorce settlements, one party will receive the right to live in the house while both maintain ownership of the property until it is sold. If the eventual sale doesn't go through as previously arranged, an ex-spouse could file a lien for his or her share of the proceeds of the sale. Some states allow a lien to be placed on a property if a parent falls behind in making child-support payments.

If a home is in a property owners association (POA) and the owner has not remained current on dues payments, the POA can file a lien against the property for collection of the dues. The dues would have to be paid off before the property could be sold.

A number of other problems might prevent you from conveying good title to a buyer, including liens placed on your property by a second mortgage holder, for payment of back taxes, or for easements. If you know there's a lien on your property clouding your title, be sure it is removed before you attempt to sell the property or at least before the sale gets to settlement.