Quiet Title Q & A

Last Updated on Tuesday, 17 September 2019 07:14 Written by Chris Griswold Tuesday, 17 September 2019 07:14

Buying or selling commercial or residential property?  If so, odds are you’ll likely come across the need to do a quiet title action – whether sooner or later.  I get calls on these regularly so I thought I’d answer some commonly asked questions surrounding them for inquiring minds.  Read more below (and don’t forget to click on my Facebook link below to also see my short video on this material).

Quiet Title Q & A

Without attempting to cover everything, I wanted to cover some of the more commonly asked questions that relate to this area of law, because most people have questions on these below:

First, what usually creates the need to do a quiet title action?  Usually, you’ll either be the buyer or seller and a title commitment will be obtained from a local, title insurance firm.  On the commitment, either Section B-I or B-II will set forth either a requirement or an exception to the title insurance coverage (known as a cloud, encumbrance or lien upon title).  This will lead the title company to instruct/inform you of the need to do a quiet title action – before such title insurance company will insure title (for the benefit of buyer) to the contemplated purchase (which is always a policy of insurance equal to the amount of the purchase price of the property to be purchased).

Second, who pays for the quiet title action?  Whoever is liable for such expenses as set forth under the purchase-sale agreement, although it’s usually the seller (since the issues arose during seller’s reign of ownership, or before).

Third, how much time should you provide (prior to closing) in order for the quiet title action to be completed?  Remember, a quiet title action is usually a type of lawsuit that has to be filed and finalized in the District County Court of where such property is located, and that takes time.  With uncontested issues, it should take 90-120 days; with contested issues, it can take longer.  Upshot?  Be sure the purchase-sale agreement provides at least an initial 90-120 days for the issues/clouds/encumbrances/liens upon such title to be cleared, subject to further written agreement (for additional time extension) by the parties.

Fourth, is there anything else to remember when doing a quiet title action, any possible surprises?  Keep in mind, a title commitment is only good for usually 180 days (just like an ALTA land survey), so, a long and protracted quiet title action which takes longer than 180 days to complete, once renewed and brought up to date again, may then show newly discovered encumbrances upon the title to the property that need to also be addressed, also prior to closing.

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