Today I’m answering your question, “What is a quiet title action?” and the topics I’ll be covering are:
- The Quiet Title Lawsuit and Why It’s Important
- Who Can File a Quiet Title Action?
- Why a Property Owner May Petition for Quiet Title
- Quiet Title Definition
- Quieting the Title After Receiving a Quitclaim Deed
- Quiet Title vs Quit Claim Deed
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The Quiet Title Lawsuit and Why It’s Important
What is a quiet title action? There’s a considerable amount of confusion and frustration about this question. I’m not a broker, financial advisor or attorney of quiet title law. However, as an author, guide and investor, I’m going to try to give you some practical insight into this business of quiet title action from a practical person’s standpoint.
Let’s discuss quiet title, what the process is, and the fact that it’s definitely a lawsuit in a court of law. In this instance, whoever practices real estate, especially tax lien certificates and tax defaulted real estate, needs to understand, what is a quiet title action in real estate and how to file quiet title.
You’re going to have a step-by-step process to follow, and it’s always a lawsuit. It could be issued on a residential lot, small parcels of land, and in many cases when you buy at a tax defaulted auction, the title company will not insure the title unless you get a quiet title on the property.
Who Can File a Quiet Title Action?
Who can file a quiet title action? The property owner via a competent attorney.
Why would a property owner file a quiet title suit? When we buy, what really happens? We don’t know what the county is going to issue us except that they give us a quitclaim deed. We don’t know if there was a survey done on the property or if people have other claims.
That requires a quiet title process because the new buyer doesn’t want to buy a property that has anything but a clear title. They don’t want any clouds on the title which means that someone else has a lien.
Why a Property Owner May Petition for Quiet Title
In many cases, the property hasn’t been researched thoroughly. The county will sell the property without a mortgage or a deed of trust loan. However, there could be other challenges. To make sure the other challenges are cleared, you would want to petition for quiet title.
What are you looking for, and what are the new buyers looking for? Are there any easements that we don’t know about, or any encroachments on the property? That happens when people sell property and they don’t do a survey. If they don’t have a survey on the land, then there could be a challenge on the title later on.
A quiet title is going to be a lawsuit in which the attorney has to sue all the people that had to do with the property, or you get some kind of objection cleared up, make sure people quitclaim it and the property has a clear title.
A mortgage lender could get involved in doing a quiet title. Why? Because there might be an adverse possession situation taking place.
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Quiet Title Definition
What is a quiet title action exactly? Number one, it’s a lawsuit. It is not a quitclaim deed. Understand there’s a massive difference between doing a quitclaim deed and a quiet title action.
This is an adversarial position. That means there are going to be conflicts, but the title disputes are going to be settled in a court of law. That’s why you have a quiet title, and the action really means that a lawsuit is taking place.
Remember, when it’s all said and done, a court order will be issued and that will settle the quiet title. You’re going to have to pay an attorney to get a court order. Then you’re going to be able to give the new owner a quiet title to the property, and they’ll be able to get title insurance. At the time of this writing, the cost of quiet title action could be $1,500 to $5,000 on average.
I know it’s expensive and sounds a little on the complex side, but when people buy property, they want to make sure there are no other liens, judgments, or things that have happened to the property. They want to make sure it’s clear. This is somewhat cumbersome, somewhat frustrating, but it’s part of the business.
Quieting the Title After Receiving a Quitclaim Deed
We buy tax defaulted real estate from the county, and we get a quitclaim deed. That does not clear the title. The challenge is the title might not be clear, and that’s why we have a quiet title.
The county treasurer will issue a deed. That could be a county deed, tax deed, commissioner’s deed or treasurer’s deed, any of those, but they’re all quitclaim deeds. A quitclaims means that the county is not responsible for the property condition, nor is the county responsible for any defects in the title.
So how will you clear up any of those defects? With a quiet title action. This is important to understand because even though the county government is issuing you a deed, that doesn’t necessarily mean that the title is completely clear on that property.
What is a quiet title action, and why would it be necessary? A quitclaim is worthless to a commercial title company. A quitclaim deed doesn’t mean anything to them because they’re not going to insure that property unless there’s a court order or a quiet title action signed off by an attorney. Sounds difficult, but it’s not. It’s been around for decades.
This is not unusual when you buy a tax defaulted property, and there’s nothing to be afraid of. This is happening all the time, and most of the properties will clear through it and get done quickly.
Quiet Title vs Quit Claim Deed
What is a quiet title action compared to a quitclaim deed? A quitclaim simply means that someone can give you whatever they own.
A perfect example would be a husband and wife having a divorce, and the couple decides that one is going to end up with the property. The other one could quitclaim their interest, giving up what they have to the other person. That would be a quitclaim.
Don’t expect that you’re going to take a property that’s got a lot of problems and quitclaim it to somebody else. A quiet title action is going to be required.
Some people think that they can quitclaim and they’re going to walk away from responsibility. It’s not going to happen.
We hope you enjoyed Ted’s lesson, “What is a Quiet Title Action?”
What is a quiet title action? It’s a lawsuit, and the attorney does all of that for you. An attorney files and records it with a county recorder.
We would advise against attempting a do it yourself quiet title. If you want to know how to be successful in quiet title action, then first and foremost, you must have an experienced quiet title attorney to do this, not just anyone.
Once the attorney gets it past the court, the court will write a court order, and the title will be clear, then the title company will ensure that the new buyer will have clear title of property.
Purchasers of tax defaulted real estate can expect to receive a quitclaim deed from the county, which would require a quiet title action to ensure that the title is clear.
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Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.