If you are trying to buy or sell a property that doesn't have a clear title, filing a quiet title action may be a beneficial way to clean up the property title. This article answers the question “What is quiet title, and when is it used in real estate?” We’ll also cover the important things you need to know about quiet title action.
What is quiet title?
Quiet title is an action lawsuit or legal proceeding that can help clear title to real property, especially if there are multiple claims, disputed interest, or title defects. The lawsuit will "quiet" certain claims to the property, clarifying ownership as well as clearing up possible discrepancies on the title.
When is quiet title used in real estate?
A quiet title lawsuit can be entered into amicably to simply resolve a title issue or to settle ownership disputes.
In real estate investing, quiet title action is most often used after a property has been purchased in a tax deed sale. Most tax deed sales will override previous liens, including mortgage lenders, transferring interest in the property from the previous owner to the new owner once the sale has been finalized. While the prior lender's interest in the property is dissolved, their claim is not removed from the title until it has been resolved through either a quiet title action or title certification.
Real estate investors may also file a quiet title action if the property was conveyed through a quitclaim deed, which is when the previous owner disclaims interest in the property, transferring interest to the buyer without guaranteeing or warranting a clear title. If there are defects in title and the new owner wants to sell the property using a warranty deed, they can file a quiet title action to resolve any issues.
Common issues that may be disputed between parties may be arguments over:
- Easement, such as a shared entry or driveway.
- Property boundaries, possibly from an incorrect survey or lack of a survey.
- Errors on the deed which, depending on the issue, can possibly be solved outside of quiet title action using title insurance from a previous title insurance policy.
- Removing previous claims of ownership after an estate sale or probate.
- Prior liens, especially if a lien or mortgage has been satisfied but there is no public record of it.
Important things to know about quiet title
Since a quiet title action is a legal dispute, the parties involved are normally represented by a lawyer who specializes in quiet title real estate law. The action is filed in a court of law by the plaintiff or the plaintiff's attorney, and the defendant is served notice of the suit. The defendant is given a window of time to respond to the suit. If contested, it is taken to court to be resolved; if no response is given or it goes uncontested, then the title will be cleared in favor of the plaintiff's argument.
The entire process takes around six to eight weeks and can cost several thousand dollars, even if it is uncontested. While quiet title can resolve a number of issues, it is a lengthier and costlier resolution than other alternatives. If you are involved in a real estate transaction and feel a quiet title action may be needed, consult an experienced real estate attorney to discuss your specific situation and see if quiet title or another option best suits your needs.
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