What is a clear title?
A clear title is a term in real estate used to indicate that the title which the owner
has over the property is free from all third-party interests and encumbrances. When a property
vendor or owner does not have a clear title, this means that the legal interest being passed
down to the purchaser can be challenged by a third-party.
An owner without a clear title does not imply that the owner does not have the power to sell the
property. For example, a lien by a solicitor or charge of a lending company may exist over a
property. While the owner can still sell the property, the title held by the owner or any beneficiary
of that title is said to be encumbered by a lien or charge.
A clear title implies that the owner is undisputed and can validly pass down a full title to a
beneficiary. It also means that the title will prevail over any outside claims from third parties.
Purchasers and their real estate agents or solicitors often ensure that the owner of a property
has a clear title to the property being sold. This critical check ensures that there are no future
problems or litigation on a property.