Title defects and similar problems can cause a real estate transaction to grind to a halt. Potential buyers generally know their options when a situation comes up – but what if you’re the would-be seller?
You may need a quiet title action, which is a type of lawsuit that asks the court to resolve any “clouds” on the title that make your ownership rights uncertain. If successful, you will gain clear rights to the property and then be able to sell.
When is a quiet title action warranted?
A cloud on title is anything that creates uncertainty about who owns a property or whether someone else may share in the ownership rights to it. Buyers and lenders are often unwilling to proceed with a transaction until these issues are resolved. Even if you aren’t selling, you may run into issues (and first discover the problem) when you try to refinance the property, during estate planning when you mean to transfer the property to a trust and in similar situations.
Common reasons a quiet title action may be pursued include:
- The deed contains an error in the property’s legal description, such as inaccurate footage or a defective legal description, or documents were improperly recorded.
- A mortgage or lien that was paid off years ago is still showing as active in county records.
- You have a boundary or easement dispute with your neighbor, such as a conflict over a fence, a property line or unrecorded rights-of-way.
- There are gaps in the property’s chain of title, which sometimes happens when a property is inherited and never officially recorded or left unoccupied for a while.
- There are inheritance issues, such as the potential for unknown heirs to assert a claim because proper notification procedures were not followed during a long-ago probate.
- You bought the property via a tax sale or foreclosure sale, and the rights of the former owners are not clearly ended.
- There is an actual or potential adverse possession claim from someone who has “squatted” or otherwise occupied the property without permission.
Even if you believe a claim against your property is clearly invalid, its mere existence can be enough to derail a pending sale and complicate your life.
Protecting your interests can be complicated when real estate is involved. An experienced real estate attorney can help you identify the issue that clouds your title, find all competing claims, publish the appropriate notices and make the correct filings so that you can move forward with your goals.
