When you've found the perfect real estate deal for either a residential or commercial property or find a buyer for a piece of property you own, you naturally hope that everything will go smoothly -- but a title issue can derail the entire process. Often, a quiet title action can help.
A quiet title action can accomplish two goals: it can settle any questions about who really owns the property and it can also "cure" the title so that you can move forward with the deal. Here's what you should know.
Quiet title actions help when the "chain of title" on a property is broken.
When a piece of property passes from one owner to the next, the action creates a new link in the "chain of title," or its history of ownership. The chain of title is important because it's the only way that legal ownership over a piece of property can be authoritatively established. Without a clear chain of title, you generally can't get a loan on a piece of property nor sell it. If another person with potential ownership rights suddenly comes forward, you can also potentially lose control of a piece of property even after you've invested in it.
A quiet title action is a lawsuit that is designed to resolve any outstanding questions about a property's true ownership. Unlike many lawsuits, quiet title actions are rarely adversarial since most of the time it's generally agreed who actually owns a piece of property. The quiet title action usually serves to make the official record of ownership clear.
Broken chains of title often occur through ordinary life events.
How does the chain of title on a piece of property get broken? Usually, it happens through a combination of events over time. When a property changes hands between unrelated owners with no previous connection to each other, the process is usually very formal. Each technical step of the process is carefully reviewed -- which help keep the chain of title clear.
That doesn't always happen when property passes from owner to owner inside a family or when a property is sold to a long-standing acquaintance. Often, the problem is simply that nobody is thinking ahead to a time when it might not be clear who exactly owns the property.
For example, imagine that your grandfather owned several dozen acres of forest in the mountains where he kept a hunting cabin. When he died, your grandmother gave the property to your father, their only child. When your father died, you inherited it. It's only when you go to sell it that you find out that the title of the property is still in your grandfather's name because your grandmother never formally transferred the title over to your father.
There may not be any real dispute over the fact that you are the true owner of the property -- but it can still take a quiet title action to "clean up" the title and make it possible for you to sell the property to a new owner.
In any real estate matter, it's important to understand the tools available to resolve your problem. If you have a question, talk to a real estate attorney today.