A quiet title action is an action filed in court to remove some “cloud” or defect on the title to real property. The defect can be a mortgage lien or judgment against the title that is no longer enforceable or that has been satisfied or paid. Some quiet title actions seek to enforce an easement right.
Most defects on the title prevent the property from being marketable, meaning the seller will not be able to convey clear title if the owner chooses to sell. A title insurance company will not insure the property through a closing in this instance unless the owner files an action to quiet the title.
The most common reason to quiet the title is when someone purchases the property at a tax deed sale. Property with delinquent tax obligations eventually go to public auction if the taxes are not paid or redeemed within a certain period of time.
In Lee, Sarasota and Charlotte County vacant lots are typically subject to these tax deed auctions. Prior owners of these lots decided not to pay the taxes on the due to the substantial decrease in value when the real estate market crashed back in 2007.
Purchasers of property at a tax deed auction take the property free and clear of nearly any other lien or mortgage attached to the property at the time of the auction. These mortgages and other liens are inferior the tax deed and are extinguished once the property is sold. There are a few exceptions, but not many.
The title insurance companies still require the purchaser to file a quiet title claim prior to offering any title insurance on the property. As result, the purchaser of the property at the tax deed auction will be unable to sell the property through a title company and obtain insurance on the title. Most title companies will not require a quiet title action if four years has lapsed since the time of the tax deed auction.
The purchaser of the property at a tax deed sale will also be required to quiet the title if they decide to obtain a loan to build on the property. Most lenders will not give someone a construction loan unless the title quiet action has been completed.
Please contact this office for more information regarding quiet title actions and whether or not you need to have one completed. Quiet title action are relatively quick and inexpensive and handled on a flat fee basis. This office does provide high volume discounts on quiet title actions if you are an investor that is looking to have several properties quieted. We also know that many investors on vacant lots are dealing with smaller margins and attempt to work with them to best ensure those profit margins are not extinguished due to high legal fees and costs.