By: Lance T. Denha
Quiet Title, as the name suggests, is the quieting or correcting of title to real estate. Even though you may have acquired your property by a deed, it does not mean that you own it without title defects. Properly performed, this process will correct the defects and allow you to refinance or sell your property. If there is a title problem you will not be able to refinance or sell the property until the defect is corrected.
Some common examples of title defects include:
- A missing deed or gap in the chain of title
- An outstanding lien or mortgage
- A property bought at a Tax Sale
- A prior owner’s failure to properly probate an estate
To quiet title in itself, the plaintiff must prove it has title to the property which is superior to the title claims of all other persons with an interest in the property. A proper plaintiff is one who seeks to establish superior title to the property. Whereas a proper defendant is any person or an entity with an interest in the property that is opposed or adverse to the plaintiff’s interest. It should be noted any decision rendered only binds the parties to the actions. Therefore it is vital to have all interested parties in the action to properly quiet title.
In order to obtain the proper parties, it would be wise for the plaintiff to consider obtaining a title commitment in order to determine those parties with a recorded interest in the property so that the suit names all relevant defendants to the actions. In addition, the plaintiff should also consider purchasing the title insurance policy before filing the complaint. That policy would contain exceptions for the parties with a recorded interest in the property. The litigation would extinguish all of the parties named in the title policy. If successful, the policy would then insure the owner just as a typical policy would do so.
Many local and foreign investors may want to consider filing a Quiet Title Action for those properties acquired through a tax auction. If the Investor fails to make a prima facie case of title, judgment may be entered for defendant. Once the Investor makes a prima facie case, the defendant(s) must prove a superior right or title.
It may be wise once a recorded judgment has been entered, to include language in the judgment stating that the Investor may use the judgment with the effect of a deed for any purpose necessary to transfer, sell, convey, or occupy the property. The judgment is recorded with the register of deeds in the same manner as a deed or mortgage would be recorded.
For Title Insurance purposes, purchasers of property from a foreclosing governmental unit following property tax foreclosure may need to complete a quiet title action in order to obtain title that a title insurance company will insure.