Today we’re going to talk a little bit about quiet title actions. As you may or may not know, my firm practices in the area of estate planning, real estate and business law. So, quiet title actions are part of our repertoire. We file quite a lot of them each year.
To give you an idea, quiet title actions are needed when you’ve got a cloud on title. If you look at the chain of title for the property at issue, and there’s some kind of problem— let’s say there’s an old lien that shouldn’t be there anymore or there’s a lean that should have been removed but was never removed —then many times you’re going to have to file an action in court for quiet titles to clear the title, so that you can obtain title insurance on the property.
Most of these things come up because an individual goes to sell their property and then finds out that they cannot. For example:
I had a potential client call me. He has a property that he listed for sale. He went into contract with a buyer. He was ready to close when the title company told him that there was a problem with title. Specifically, there was an old deed of trust in the chain of title that had not been reconveyed. So, there was this open deed of trust on the property that prevented him from closing on the deal. What we would have to do in this case, because a deed of trust is generally something that is recorded in the chain of title by a bank, in order to remove that from the chain of title, he is going to have to file a lawsuit.
Another example is if there’s something wrong with the chain of title in terms of ownership, like maybe there’s some kind of a rogue deed where the property was deeded to somebody that should not have been on the chain of title. Then, you have to file suit and you’ve got to name all the prior owners on title and try to clear it all out so that you can obtain title in your own name.
Quiet title actions can take a long time or they can be very quick. It all depends on what the person that you’re naming as a defendant is going to do. And that’s true for any litigation case. It all depends on if they’re going to fight back or if they’re going to roll over or if you’re going to get a default judgment against them.
Unfortunately, it is a necessity in many cases where you’ve got some kind of document on the chain of title that hasn’t been cleared and the title company refuses to insure until it is taken care of.