What Is a Quiet Title Action?

August 26, 2022by Brian Walsh

Title work sometimes feels like an afterthought. If there is drama to be had in acquiring, selling, or transferring ownership to real estate, it usually occurs at the level of the appraisal, the inspection, or the negotiation between parties. Compared to other theaters of the transaction, the title work almost feels like a snooze.

… Until it doesn’t. It’s rare, but occasionally title work uncovers a serious problem. That’s why we never skip the title work. Title problems could cause the asset to languish in judicial limbo and ultimately fail to change hands. If you’re unlucky, this could be after huge, nonrefundable checks have already been cashed.

So what do you do if the title company uncovers a problem? The best solution might be a quiet title action. With a successful quiet title action, you can successfully transfer property even if problems do emerge in the title search.

First Things First — What Is Title?

Title is the condition of ownership of property. When we acquire real estate, sometimes we say that we “take title to that real estate.” You can also take title to other classes of property — automobiles, boats, and aircraft, for example.

How Title Gets Transferred

The legal proof of title is a document called a deed. If a property-owner has the right to sell or transfer property, (s)he will sign a deed to the effect. How do we know that the owner has the right to sell, transfer, or dispose of the property? By the deed that the previous owner executed when the current owner first took title to the property. 

Deeds get recorded with government clerks and transcript offices so there is a verified public record of the deed that anyone can search to verify who owns which parcel of real estate.

Several types of deeds can be used to convey title to real property, including:

General Warranty Deed

A general warranty deed is the preferred method of transferring title from one private party to another. With a general warranty deed, the seller guarantees (or “warrants”) certain conditions to be true about his/her title to the property:

  • That the seller is the current owner.
  • That the seller has the absolute right to sell, transfer, or dispose of the property.
  • That the property is unencumbered by any mortgages or liens that will not be settled at or before closing.
  • That the title is free of defects. No competing title exists that would preclude the buyer from owning, accessing, or using the property.
  • That the seller agrees to hold the buyer harmless and defend him/her against any claims of ownership asserted by someone else.

Special Warranty Deed

If there are problems in the chain of title (see below), title can be conveyed by a special warranty deed instead. A special warranty deed only warrants the above conditions for the period the current owner held title to the property. 

This is clearly not preferable because it lets the seller off the hook if any competing title claims emerge from the period before the current owner held the title.

What Is “Clear Title?”

When we say a title is clear, it means we have verified that the owner named on the most recent deed is in fact the current owner, with full rights to sell, bequeath, transfer, or dispose of that title. No other claimants can emerge to claim ownership of that property, nor will any undisclosed liens and encumbrances convey with the title.

If more than one person or entity claimed the title at any point in the past, title might not be clear. It might also not be clear if conflicting surveys are found — it might mean that different deeds don’t properly identify the property, and some portion of the land being sold actually belongs to someone other than the seller.

Obviously, most buyers insist on a clear title. After all, they’re handing over a lot of money and taking on debt to purchase that property. They don’t want someone to emerge, after all the checks have been cashed, and say “That person didn’t have the right to sell that property! I am the legal owner of that property, and I demand the keys!”

How Do You Verify Clear Title?

Attorneys and title officers verify that a title is clean by searching public records for the chain of title. This is every deed to the property, as well as every survey of the property, that has ever been recorded, in sequence. 

The lawyer or title officer wants to see that there was only one deed at any given time verifying ownership of that property, that each new deed was executed by the person who received the last deed, and that no competing deeds are out there floating around to potentially muddy the waters of ownership. They also want to see that the surveys match — that each deed describes the same property, with no land added or omitted.

If any of this cannot be verified, there may be a competing owner of some or part of the property somewhere. Also, it could mean that at some point in the property’s history, someone sold the property who did not have the right to sell it.

What Happens If the Title Isn’t Clear?

If the title can’t be verified as clean, we say that there is a “cloud” on the title or a “defect” in the title. It is not “clear.”

Most contracts of sale are contingent on the delivery of clear title. Buyers also purchase title insurance to protect themselves against financial loss due to incomplete or faulty title work.

What kind of financial loss are we talking about? The buyer could fork over the down payment, borrow a huge mortgage loan, and claim the keys … only for someone to come out of the woodwork claiming that they are the rightful owner of that property, and they have the competing chain of title to prove it.

If a court rules that the rival claimant has a legitimate claim, it may order title to be transferred to the rightful owner … who is not required to compensate the jilted buyer for the cost of the down payment and the mortgage. The buyer can only claim the loss against the title insurance policy.

So What Is a Quiet Title Action?

Sometimes clouds and defects in the title are easy to clear with a few phone calls. In more extreme cases, however, an attorney may need to file a quiet title action to close the sale. 

A quiet title action is a lawsuit that asks a circuit court judge to declare the title clean. The title work as it stands is presented to the judge, and the judge declares that any competing claimants to the title have 20 days to come forward and prosecute their claim, or else give up their claim forever.

  • If known potential claimants exist — those claimants must be served notice of the quiet title action. The clock starts on their twenty-day window to respond as soon as service of process is confirmed.
  • If no known potential claimants exist — i.e. there could be competing claims, but no one can verify from whom, process cannot be served directly. However, the process can be counted as served if a notice of the lawsuit runs in a publicly-circulated local newspaper every day for four consecutive weeks.

If any claimants come forward during the set period of time, the judge will rule on the validity of those claims.

If no competing claimants come forward, or if the judge finds their claims lacking, the judge will rule that any competing claims on the title are invalid (aka “quieted”) and declares the title clean. The sale or transfer can then proceed just as if there never had been a problem in the title work.

Circumstances That a Quiet Title Action can Fix

A quiet title action can be used to correct a number of clouds or defects in a chain of title, including but not limited to:

  • Missing heirs – a previous owner tried to bequeath the property, but the heir was never found.
  • Fraudulent conveyance – someone sold or transferred the property without actually being the owner.
  • Tax Deeds – a county property tax lien that was filed but never foreclosed upon.
  • Foreclosures – a foreclosure proceeding that was filed but never executed.
  • Adverse possession – occupation of the property by someone who is not the owner and refuses to leave.
  • Prescriptive easements – the right of someone else who is not the owner to enter the property. 
  • Alternative to probate – allow the house to convey to heirs quickly without sitting in probate for years.
  • Boundary disputes – disagreements about where the property begins and ends.
  • Surveying errors – mismatched surveys that leave it unclear about which dirt belongs to which parcel.

How Long Does a Quiet Title Action Take?

It depends on how complicated the cloud is and whether or not the potential competing claimants can be identified. 

If you know exactly who might try to claim the property and can find them to serve them notice, a quiet title action can take less than 60 days.

But if no potential claimants are known, you have to endure that four consecutive weeks of public notice in a local newspaper. This can stretch the proceeding to as long as 90 days.

What Problems does a Quiet Title Action Solve?

If the judge approves the quiet title action, the title is ruled to be clear with all clouds and defects invalidated or “quieted.” The only encumbrances that might remain on a title after the judge has ruled on the quiet title action are bank mortgages and property tax liens.

If title cannot be verified as clear, that doesn’t mean the sale is off. It might take a little longer, but a quiet title action is an effective way to use the judicial system to push the deal through.

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