What are title clouds, and how can they impact a property closing?

First National Title (FNT) is proud to be Arkansas’s largest independent title company, and our team of title and closing professionals is standing by to assist you with your upcoming real estate transaction. Whether you’re purchasing a new home for your family, or adding new properties to your investment portfolio, we have the experience and expertise to help you make sure your closing is done right! We operate 25 locations throughout The Natural State to serve you and you can always count on the personal touch!

Contact us as soon as your property is under contract, and our team of title researchers will go right to work to ensure that there are no defects on the property title. These title defects are commonly known as “title clouds” because they can cast a shadow over the property and the ability to conduct the closing. Some title clouds are easier to resolve than others, but the seller must successfully demonstrate clear and unencumbered ownership. Here are a few types of title clouds that can delay or stop a real estate transaction:

Liens against the property title —If an owner owes delinquent taxes, HOA dues, or child support, his or her creditors might have liens in place against the title. Those outstanding debts must be settled before the property can change hands.

Unknown heirs—If a previous owner died without leaving a will, there could be previously unknown heirs with a legitimate claim to the property.

Fraud and forgery—Closing documents and legal filings are prepared by licensed professionals and signed in front of a notary public. If it’s later discovered that a previous owner signed a relative’s name without their knowledge, the new owner potentially faces a lengthy legal battle.

After we’re satisfied that the title is unencumbered, and the real estate closing has been consummated, we’ll issue you an owner’s title insurance policy that will be effective for as long as you own your home. We offer title insurance from top insurers, including First American Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land and Title Insurance Company, Fidelity National Title Insurance Company, and Old Republic National Title Insurance Company. With this policy you’ll be protected in the unlikely event of a future title dispute.

If you have any questions about title insurance, contact us online or at any of our 25 convenient Arkansas locations listed below!