What is Quiet Title?
What is “quiet title”? Why do you have to do it? When we talk about quiet title, it has to do with real estate and as you may know, we do a lot of real estate related litigation and transactions at our firm, so this comes up quite frequently and we’ve litigated hundreds of quiet title actions. Typically, what happens is somebody tries to sell their home or a property that they own and when they get into contract, at least here in Nevada, that’s when escrow opens up an account for them and pulls up what’s called a preliminary title report. A preliminary title report shows everything that’s been recorded on the chain of title for that property.
When this is done, that is where you might find issues, that is why they do it. They pull it to see if there are any issues that would cloud the title and prevent the sale from moving forward. That’s typically when our clients find out that they need to file suit. They get the preliminary title report and they realize that maybe there is a lien on the property from 20 years back that has not been extinguished or released (what we would normally call released on title). They would call my office to let me know that there is a lien on the property, that company no longer exists, and they do not know how to get it off there. That is generally where we come into play and we try to find the principals of the old company and see if we can negotiate with them to release the lien.
If that is not possible, then the only other option to clear the title is to file what is called a quiet title action, that is where you file suit against whatever is clouding the title. In this case, in my example, it would be the old company that no longer exists because the title insurance is going to require a clear title before they issue a title insurance policy. Whenever you sell a piece of property, you’re going to want title insurance for the property. The title insurance essentially says, “I own the property free and clear and I have the right to sell it”. There’s also a title insurance policy that the buyer receives that they received clear title and if there’s any issues in the future that pop up that happened before they purchased the property, then their title insurance is insuring them and will defend them in any litigation.
That’s why you have to have a clear title in order to sell a piece of property. And unfortunately, sometimes you have to file quiet title actions to clear the title so you can sell the property on the open market. With that being said, there’s plenty of properties that might not have clear title that may be sold on secondary markets, not with title insurance. You may have seen a Craigslist random posting saying, buy this house and it’s 50% less than market value. There’s a reason for that. They’re probably selling it without title insurance and you’re taking the risk that you’re getting the ownership of the property and you’re not buying litigation.
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