WHAT DOES QUIET TITLE MEAN? KNOW THE ANSWER TO AVOID MAKING A BIG MISTAKE
What does Quiet Title mean, and why is it so important? Pay close attention. Ted will show you how to avoid making a BIG mistake that could hurt you if you want to resell that property you just picked up for a steal at the auction.
Today we’re going to cover “What does quiet title mean?”
I’ve been involved in the tax lien certificate, and tax deed business for over 30 years. I started as an investor and then I became an educator. Since that time I began, I’m back to investing. I do tax liens and tax deeds, so you’re going to really learn a lot.
I’m going to cover a couple of things that, are really a little sticky, and people worry about it all the time. I’ve even made some notes today to bring along with me.
WHAT DOES QUIET TITLE MEAN AS A LEGAL PROCESS?
So what does quiet title mean? Well, first of all, it’s a legal process that ensures, the new buyer, that they’re getting a property free and clear of other encumbrances.
Now, what happens at a tax auction, is the auction is built as clearing all liens from the property. So when you buy the property all the liens should be cleared, and the marketplace assumes that always works correctly.
However, if the County makes a clerical error, or there is some errors in the title, the unfortunate thing for you, if you bought that property, is that they’ll disclaim any errors and say, “Oh, you bought it as is.”
So I want you to understand when the government disclaims things, you should not trust the government. You’re going to have to do the job yourself.
I’m not an attorney, and I’m not a real estate broker. I’m an investor just like you are. So this is not a legal class by any means, but I want to walk you through this process of quiet title. On some occasions, I’ll quote some things that I looked up in Wikipedia to give you a reference.
I’ve talked to many attorneys about this. It’s is a little bit of a challenge when you first start, but you’ll be able to figure the process out. So I’m just here as an educator, trying to make things easy for you.
There are over 3.000 counties in the United States, and they all run kind of as little fiefdoms. In other words, they do what they want to do. The legislature in the State makes the rules and then passes the rules down. But over the years, the rules get modified and change, and the County officials, do somewhat what they want.
They claim they’re going to follow a very close procedure, but I can tell you if you get a property that doesn’t have a clear title, you’ll find out that it’s going to take some time and effort to clear it. So, a quiet title is a legal process that the attorney will do.
I’ll try to explain it in layman’s terms the best I can. I’m not an attorney. I’m not a real estate broker. I’m an entrepreneur just like you. So, I want to view this as an entrepreneur, and I want you to because these tax lien auctions, and tax defaulted property auctions, are a big time opportunity for you.
Why do I say it’s a big time opportunity because sometimes we buy properties for less than 10 cents on the dollar. If they have no mortgages, and they have no encumbrances, well, that gives us a lot of margin to mark them up and make them make us some money.
I’ve learned from experience. My experience has been, do your due diligence, do all the checking you can. Now, we actually have classes. They’ll teach you how to research the County records, but 99% of the people don’t want to do the research, and don’t want to do that. They love to go to auction, raise their hand and bid.
Many cases they make the big mistake. What’s the big mistake? That is, they buy a property without even looking at it.
WHAT DOES QUIET TITLE MEAN? A CLEAR TITLE
Let’s get back to this quiet title business; I want to talk to you about that. It may sound amazing to you, but I’m going to tell you that most people never even check on this. I’ve gone to attorneys where they say in the state that you have to clear the title.
So I bought the property, and then I called and said, “Well I want to do a quiet title before I sell it.” and the attorney will say, “Oh, you don’t even have to do that. We’ll just get it all done for you.” Then they go ahead and sell the property.
Well, my feeling is if the attorney signed off on it, they’re going to be responsible. So I go ahead and move forward with the deal. But, there are going to be times when that’s going to get sticky, and something’s going to go wrong.
So I’m going to suggest to you that when you get involved in this, that there’s a little extra charge and a little extra time, but it’s worthwhile, if you understand what does quiet title mean?
All it means is, that you’re going to hire an attorney ultimately, and he’s going to go back through all the records:
- Encumbrances
- Mortgages
- Judgments
- Liens
- Federal liens
- State liens
- Government liens of any kind
They’re going to make sure those are all cleared from the property.
If they can’t find the people, they’ll send many notices in the mail, and they will be required by a judge to show that they did that. They’ll be required to show that they did that by publishing it in the newspaper.
WHAT DOES QUIET TITLE MEAN? PROTECTING YOURSELF
What’s really happened is the local government has confiscated a property. If they have done all this work, which we all assume; we assume because they’re selling it to us. We assume this, but if we go and look at the deed that we get, it might say right in it that they disclaim any responsibility for clerical errors or title errors.
That means they’re doing just that, they’re disclaiming. So just by writing that in the deed without you knowing it, they have disclaimed any responsibility. They don’t care, and what are you going to do about it?
Well, you’re going to do what we’re talking about today. You’re going to learn what does quiet title mean? It means that you’re going to hire an attorney ultimately to do a lot of work.
First of all, none of this is magic. I’m not trying to scare you. I’m trying to get you to just understand from my perspective, layman’s terms, non-attorney, non real estate broker, how to do this business.
I want you to be successful. There’s no reason not to be successful, but this word, quiet title, scares the living hell out of you. It’s going to scare you if someone tells you, “Oh, you’re going to get a whole bunch of mortgages.”
Now, what’s the County in business to do? Let’s talk about that. They’re in the business to collect money. What kind of money do they want to collect? They want to collect property taxes. So let me talk about that. It would give you a perspective and get a little foundation, okay?
The foundation is this. People didn’t pay their taxes. When they don’t pay those taxes, the County then goes out and gives notice. The notice then turns into a confiscation. Then they seize the property.
WHAT DOES QUIET TITLE MEAN? BEING RESPONSIBLE FOR YOURSELF
The assumption is that they check all the records, and then put it back into their market. Well, I’m not so sure the assumption is right, so you don’t want to be assured of that either.
We have lots of classes so you can check on that, and you might want to have an attorney check on it for you too. The point is, if they don’t do all the appropriate work, they are going to disclaim it.
They’re just going to say, by giving you a quitclaim deed, and I’ll explain that too; they’re going to give you a quitclaim deed, and say, “We disclaim any responsibility.” That means you’re going to have to start worrying about that.
You’re not talking to an attorney. I’m not acting as an attorney. I’m just an educator teaching you what’s going on here.
Why does the County need the money in the first place? Well, they want to pay the County employees. They want to make sure that the schools are taken care of. They want to make sure the roads are fixed. So that’s what the County does.
Everybody thinks it’s so official. They’re just a place to get all this County work done. Although some of that work is pretty darn important, like making sure the police are paid, make sure the fire department gets some. So you get the idea.
If you ask them a question, I can tell you right now, if you ask any employee, they’re going to say, “Oh, I can’t give you legal advice.”
Well, you’re just asking a question, not asking for legal advice, but they’re going to disclaim everything because sometimes they don’t do the work right.
Am I here just bitching about the counties? No, I’m here telling you, that you have to take care of yourself. You have to be responsible. Lots of people don’t want to be responsible. If you want to make money big money, you suddenly have to be responsible.
I want to make sure that I cover a few legal items. I did just a little bit of research on Wikipedia, and I’m going to ask you to go there and read what it says. I’m just trying to get all the caution words in your head, so that you know about that.
Unfortunately, the County will disregard information. They might not do it quite correctly. Maybe it’s because they just got overwhelmed with all these properties that came in when people didn’t pay the tax. So maybe they’re just overwhelmed and they’re overworked.
HOW LONG CAN IT TAKE TO GET A QUIET TITLE?
My suspicion is they just don’t want to do the work that takes a long time to get done. So here’s how long a quiet title could take. It could take you two or three of four months on the average. However, I’ve been a victim and taken even a year to get one.
When you’re paying the attorney, you’re not going to like that. So the point I’m trying to make is quiet title is not something to be scared of. Let me read a couple of points. I’m just reading, quoting from Wikipedia. That’s all I’m doing. I’m not an attorney, so I can’t interpret any of this for you.
WHAT DOES QUIET TITLE MEAN? CLEARED ENCUMBRANCES
If the property has a cloud on title, that simply means a property cannot be sold and insured until a clear title of all encumbrances. Now, encumbrance is a loan, it’s a judgment. It’s something that’s burdening the property. All encumbrances have been cleared, specifically, so that they are satisfied.
When an encumbrance is cleared, they use the word satisfied. So that’s what you’re looking for. Now I’ll help you out. You can go to Wikipedia and see these same things. Or the easy way is, find an attorney, a gray-haired attorney, that’s been around and done this to go through this process for you before you sell.
WHAT DOES QUIET TITLE MEAN TO TITLE INSURANCE COMPANIES?
A lot of title companies will say, “Oh, you’ve owned it.” and they’ll just go ahead and give you title insurance. If you have title insurance, you don’t have to worry about it. But if you’re getting into a situation where you want to buy, and the new buyer says, “I want title insurance,” which is expected. I want title insurance. Well, they’re not going to get it.
If the title insurance company says they won’t give it, you’re going to have to go through this process.
The County really is in what business? They’re in the business of taking care of the police and the fire department. They’re fixing the roads and fixing the schools. Now they suddenly get in the property business because they have the power given to them by the legislature to take these properties, confiscate them, and resell them.
WHAT DOES QUIET TITLE MEAN? A QUIET TITLE ACTION
What if they don’t do it right? Well, I don’t know that they do it right. I’m not able to tell the County treasurer what to do. So you might have to do what’s called a quiet title action. During that action, you might find out that the County has disclaimed any responsibility. If they have disclaimed it, there’s nothing you can do about it.
Just do the quiet title, get it finished, and then pass on a clear title to the next person coming along.
Most of the work is going to have a mistake. It’s a result of people not doing the work right. I don’t know that the County gets on the web or interviews people and makes sure they really know what they’re doing, or whether they just make sure that paperwork passes by. I have no way of knowing any of that.
WHAT DOES QUIET TITLE MEAN WHEN YOU RESELL PROPERTY?
I buy at the auction with the intention of reselling it. If you’re going to buy with the intention of reselling it, you might want to say to yourself, “All right, Ted talked about this. What is a quiet title? Well, I might have to get one of those.”
Don’t just get anybody, and don’t talk to anybody because it’s going to do you no good. They don’t know what they’re talking about. You need an attorney that specializes. All right. So if it’s a dentist they don’t fix feet; podiatrists, they don’t fix teeth.
You’ve got to get a guy that knows what he’s talking about because all those other guys, they’re going to bill you $200 or $500 bucks an hour, and they won’t know what they’re talking about.
IN CONCLUSION
When you’re purchasing tax-defaulted property, the counties don’t always complete the paperwork correctly, and they usually disclaim those errors. An error could become costly to you if it leaves your title with an encumbrance. So it’s paramount that you make sure your title is clear and follow the process correctly.
That’s why knowing how to use a quiet title can save you a lot of money and heartache. What does quiet title mean to you? It means being able to rest easy knowing that your title is clear.
If you’re learning something here, but want more information, what you need to do is join my community.
If you do become a part of my community, I’ve created a fast start program for you that covers tax liens and tax deeds. You can learn a lot from that program. It’s valued at $197, but I’m giving it to you absolutely FREE. All you have to do is go to the link.
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