Tax Deeds Auction: Title Issue?

9 Replies

I bought a land at a tax deed auction in California. I bought it 8 months ago. The buyer will finance it with a loan.

The deed I received does not seem to have clouds on the Title. Do I have to do a quiet title step or use the service Tax Title Service before I can sell it? Do I have to wait 12 months to make the Title transfer clean and clear with our doing a quiet title or use TTS?

You can use TTS, or wait 4 years. You can also convey by Quitclaim Deed, or Special Warranty Deed, without TTS, right now.

Originally posted by @Joseph Ball :

You can use TTS, or wait 4 years. You can also convey by Quitclaim Deed, or Special Warranty Deed, without TTS, right now.

 The 4 year period is a FL rule, I have no clue about CA.   If the buyer is financing (which is what the OP said) then quit claim or special warranty won't work, it must be conveyed with clear insurable title.  The only options are generally quiet title or one of the companies that specializes in clearing tax deed titles and will insure it.

Patrick L. is correct. If financing, you will need to quiet the title.

What if I just wait the one year after my purchase? Do I still need to do quit claim in CA?

@Matt Smith  You need to talk to a Local title co. or RE attorney.  You need to verify any title issues you may have, and how to proceed.  Tax deed title issues are state and the individual property specific.

Originally posted by @Matt Smith :

I bought a land at a tax deed auction in California. I bought it 8 months ago. The buyer will finance it with a loan.

The deed I received does not seem to have clouds on the Title. Do I have to do a quiet title step or use the service Tax Title Service before I can sell it? Do I have to wait 12 months to make the Title transfer clean and clear with our doing a quiet title or use TTS?

 Good post. 

As you can tell, people who post about what they think they know applies to one state may very well NOT apply in another jurisdiction.

I could give you a lot of title talk about what you may need to be concerned about however, the real question is whether or not a title company will insure for lender or buyer on resale. 

My guess is that you probably do not have marketable title that would satisfy most mainstream title insurers like First Am, Stewart, Chicago or Old Republic. 

I once spoke to the CEO of Title Tax Service and realized that they're just another outlet that takes a chunk of risk (for a fee) and underwrites through one of the major insurers. If I recall right, he was an ATO at another title company before starting his little operation.

I don't think quiet title action would be necessary unless you don't go the TTS route. It's not cheap in CA and cumbersome and lengthy.

In the end, you'll probably end up selling the property without a full title policy by finding either an all-cash buyer or selling for cash plus seller carry back for a large part, as negotiated. Just my opinion. 

Originally posted by @Alexander Merritt :

@Ned Carey may be able to help here....

 Well no more than @Rick H. I think he nailed it.  I don't know the CA rules at all. In my Market all of a sudden our main title company said he could insure our tax sales anymore. We started to panic as several others said the same. Eventually we found several that have no issue with the fact it was a tax foreclosure and are happy to insure. 

The point being ask around and see what title companies say. Will they insure and under what conditions?

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

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