Clear title refers to the uncontested and unencumbered ownership of real property. A property lacking clear title is said to have a cloud on its title. A cloud on title may arise, for example, by a lien for nonpayment of a note secured by the property. Clouds on title may be removed by bringing an action to quiet title in a court of equity.
Before purchasing property, the purchaser will usually hire a title companies or abstractors to search out the chain of title and provide a report so that a purchaser will be assured the title is clear of any claims. In many real estate transactions, insurance companies issue title insurance based upon the chain of title to the property when it is transferred.