What is a claim that clouds the title of real property and must be removed before transfer called?

A claim that clouds the title of real property and must be removed before a transfer occurs is referred to as a "cloud on title." This term specifically describes any claim, condition, or encumbrance that may invalidate or impair the title to a property. It can arise from various sources, such as unpaid liens, unresolved easements, or legal judgments. The key characteristic of a cloud on title is that it creates uncertainty regarding ownership, making it essential for sellers to address these issues before a transaction to ensure a clear title is transferred to the buyer.

In contrast, liens, easements, and encumbrances more broadly refer to rights or interests in property that may or may not cloud the title. Liens signify a financial interest or claim against the property typically due to debt. Easements grant specific usage rights over the property for certain purposes, while encumbrances encompass various claims that might affect ownership or use, not necessarily all being problematic. However, a cloud on title specifically identifies the issues that require resolution to establish clear ownership before a property sale can proceed.