Clearing title for land bought in cash

11 Replies

This story may be long and I'll do what I can to summarize.  Here's the scenario.  I purchased a piece of property with cash.  It was my very first time purchasing property with cash and I thought it would speed things up.  Many title companies stated that they couldn't do the deal but one title company sent us to a lawyer who said they could.  That lawyer drew up a General Warranty Deed and received a limited title certificate, we signed and paid the seller directly.  The seller believed it was his property because his mother quit claimed the property to her children and all of the children quitclaimed their piece of the property to him.  The Warranty Deed is filed and we get the deed back.  We are happy. 

The property is in a flood zone and I wanted to use my own contractors to build my first home on the property.  I even had an architect draw out a home for me.  Because it's in a flood zone, we have to do engineering drawings and flood mitigation plans.  This takes months to accomplish and out of pocket expenses.  After this is complete, we started working on finding the contractors and they proved to be unreliable.  This caused me to scrap that idea and go with a builder.  The builder looked at the plans I had drawn up and told me the house was going to cost me over 300k to build.  So I scrapped that plan and went with a smaller plan.  We agreed and started moving through the process.  When the process gets to title, the title company says that the title is not clear even though I have the general warranty deed.  Process is halted to prove that the land belongs to the guy I bought it from.  Turns out the seller's father never went through probate.  So in reality, the property never completely belong to his mother in the first place.  Monkey wrench.  I go back to the seller for my money but it's been too long.  He's spent it and taking him to court wouldn't avail much.  All of his money is tied up in retirement accounts.  Can't garnish that in Texas.  On to the hunt. 

Sellers step-father died in 1981 and the seller doesn't know if he had any siblings or if this was his first marriage.  There's no way to really prove he didn't have another family or kids, which sounds really weird to me to try to prove.  I don't even know how I would prove that.  We subscribe to ancestry.com and research the family like crazy without finding anything.  I get with an attorney who says we can get some proof of heir ship documents from the sellers siblings, but we're still having problems closing.  My attorney states if this doesn't work, then we'll just have to an adverse possession.  We would have to fence the property in for 3 years and then file the papers.  Now to the questions.

Is this my only course of action?  Why are lawyers so expensive when they don't get the desired result at times?  I paid the attorney to draw up the proof heirship documents and get them signed, her idea, but the title company still didn't accept it.

What would you do?

@Rick H.   If someone hasn't went through probate and the title company doesn't like the current proof of heir ship documents, is adverse possession the only way to posses? 

I've already paid for the property and can't get money back.  Owner died in 1981 and is on record to only being married once and having no kids.  But the title company still isn't happy. 

Originally posted by @Curtis Curley :

@Rick Harmon  If someone hasn't went through probate and the title company doesn't like the current proof of heir ship documents, is adverse possession the only way to posses? 

I've already paid for the property and can't get money back.  Owner died in 1981 and is on record to only being married once and having no kids.  But the title company still isn't happy. 

 Thanks for taking my point in good spirit, as intended.

Making title company happy is never my objective. I had an epiphany many years ago when I realized that title company want to sell insurance policy at a profit and reduce their risk to zero. 

"Here. Buy our umbrella but you can't use it when it rains"

If YOU are willing to let the title company transfer risk back to YOU, you might be able to get title policy. They will probably do an indemnification or similar way to find a way to sell you a policy for which they won't defend title in the unlikely event you are later sued by some mushing heir or other claimant.

Here are the magic words to ask your T.O.:

"What can we do that will make your underwriter feel comfortable writing this policy?"

Read your title policy of insurance to determine if you have a claim.

You're about to learn how title insurance policies work (or when they don't).

There are several aspects to your matter:

1) How to resolve

2) Who bears the costs of fixing

I used to see title problems as annoying expenses, after a few liens were missed that I had to pay for. Later, I learned how to make money from mistakes and oversights made by others and the wonderful, wide world of solving title problems opened up opportunities never seen before.

Ask title officer of your insurer what they WOULD accept. It might be bonding around or indemnification. The issue is the dangling, but highly unlikely, risk of another claimant coming forward later, especislly after you've significantly improved the property.

Alternatively, you could spend the time and money to research the deceased Father's family tree, then skip trace any heirs and offer them something for their interest(s). That sounds daunting to me as they'll probably see you are in a pinch. 

The point of AP is to bar any other claimants by quieting title. Think of Quiet Title as "Hush Up" to others who might think about making noise in the future.

Originally posted by @Curtis Curley :

This story may be long and I'll do what I can to summarize.  Here's the scenario.  I purchased a piece of property with cash.  It was my very first time purchasing property with cash and I thought it would speed things up.  Many title companies stated that they couldn't do the deal but one title company sent us to a lawyer who said they could.  That lawyer drew up a General Warranty Deed and received a limited title certificate, we signed and paid the seller directly.  The seller believed it was his property because his mother quit claimed the property to her children and all of the children quitclaimed their piece of the property to him.  The Warranty Deed is filed and we get the deed back.  We are happy. 

The property is in a flood zone and I wanted to use my own contractors to build my first home on the property.  I even had an architect draw out a home for me.  Because it's in a flood zone, we have to do engineering drawings and flood mitigation plans.  This takes months to accomplish and out of pocket expenses.  After this is complete, we started working on finding the contractors and they proved to be unreliable.  This caused me to scrap that idea and go with a builder.  The builder looked at the plans I had drawn up and told me the house was going to cost me over 300k to build.  So I scrapped that plan and went with a smaller plan.  We agreed and started moving through the process.  When the process gets to title, the title company says that the title is not clear even though I have the general warranty deed.  Process is halted to prove that the land belongs to the guy I bought it from.  Turns out the seller's father never went through probate.  So in reality, the property never completely belong to his mother in the first place.  Monkey wrench.  I go back to the seller for my money but it's been too long.  He's spent it and taking him to court wouldn't avail much.  All of his money is tied up in retirement accounts.  Can't garnish that in Texas.  On to the hunt. 

Sellers step-father died in 1981 and the seller doesn't know if he had any siblings or if this was his first marriage.  There's no way to really prove he didn't have another family or kids, which sounds really weird to me to try to prove.  I don't even know how I would prove that.  We subscribe to ancestry.com and research the family like crazy without finding anything.  I get with an attorney who says we can get some proof of heir ship documents from the sellers siblings, but we're still having problems closing.  My attorney states if this doesn't work, then we'll just have to an adverse possession.  We would have to fence the property in for 3 years and then file the papers.  Now to the questions.

Is this my only course of action?  Why are lawyers so expensive when they don't get the desired result at times?  I paid the attorney to draw up the proof heirship documents and get them signed, her idea, but the title company still didn't accept it.

What would you do?

 Loved the book, read the clif notes.  :)  

What do you need title insurance for?  Do you need it in order to finance the construction?  Just curious.

Ok ways to clear title.  

1) adverse possession with color of title.

2) Time:  (check with your particular state for specifics)

In Florida, the same statute that covers adverse possession also states that if one heir gives their interest and you possess it for the same time as the adverse possession it is deemed you were given full ownership.

3) quiet title action:  basically a interest foreclosure.  You state your claim as the owner of record based on your deed.  You notice the parties you no of and publicly notice the rest by posting in the newspaper.  There is a timetable for any interested party to challenge your claim.  If they don't, the court grants you 100% ownership.  (Title company accepted usually.. Check with them first to make sure they do)

Hope this helps

The Title Company not being willing to issue a policy in the property should have been the first thing that gave you pause.

You may be stuck now, unless you're gonna move forward all cash for everything and are willing to accept the risk.

FYI, I was able to settle this issue by working directly with a title company.  They looked at my documentation and agreed to insure any transaction I wanted to make.