In real estate, the term clear title is the definition for property that is clear from liens, encumbrances and judgments, and it belongs solely to the owner. Other terms for clear title are often used interchangeably, such as “free and clear title.” When a title is clear, no other party can make a legal claim for ownership of it. A property holder can obtain a clear title while it is under the encumbrance of a mortgage. A mortgage is specifically worded to convey a clear title once the owner pays the balance of the mortgage. A clear title is required to buy or sell any piece of real estate in the United States. During a sale of property, a title company is hired to investigate each title to ensure it is clear. Aside from financial issues, code violations may also prevent a clean title.
