Title insurance for Alabama tax deed. Already have quiet title.
Investor · AL · Member since 2018 · 26 posts · 9 votes
I acquired the tax certificate in 2017, and acquired the tax deed in 2020. The quiet title was completed January 2021 but Fidelity National Title will not provide insurance until I've have the tax deed for 3 years.
Any suggestions for another title insurance company that will provide coverage for a tax deed that has a quiet title?
@Tyson Begly, who turned you down? The assistant, the lawyer in charge of the office, or the underwriter? You might need to go over somebody's head to the underwriter. A quiet title order trumps everything. If you can't get insurance through them, some other title company will write it.
Just have your title rep./company shop around. Normally they're not limited to writing on one paper. There are typically several big companies and maybe some smaller one they might be able to use.
@Tyson Begly, who turned you down? The assistant, the lawyer in charge of the office, or the underwriter? You might need to go over somebody's head to the underwriter. A quiet title order trumps everything. If you can't get insurance through them, some other title company will write it.
@Denise Evans I'm obviously going to agree with you because I get all my tax lien education from you. The local title service company said they couldn't do it because Fidelity National Title said no, and that is their only title insurance partner. They said they've closed similar deals in the past, so it seemed like a newer issue for Fidelity National Title.
@Bruce Lynn I asked them to shop around, but it's their only partner. I may just need to find another title service company.
@Tyson Begly, yes shop around.
@Tyson Begly my experience is most title companies can't effectively deal with anything but a plain vanilla homeowner purchase. For most, investors deals are not their specialty. Bring in the tax sale element and they can be totally lost.
This could very well be a matter of the title company not knowing enough to effectively communicate with the fidelity underwriter. As others have said shop around. Fidelity and it's subsidiaries are some of the only ones that will insure tax foreclosures in MD.
Have you asked for an explanation as to why Fidelity won't insure, that position seems a little unusual.
Try "tax title services". The forum won't let me post their website even though I'm not advertising for them. I believe they offer title insurance for tax deed properties.
I believe Tax Title Services does not issue title policies. They offer title curative services and then after completion, work with a title agent to have a title policy issued. I also believe that many times the policy that is issued has a provision that any subsequent policies, say to a new purchaser, must accept a policy from the same underwriter. Since Fidelity is one of the largest title insurers, if they have declined to insure title, I also believe the title is effectively unmarketable.
Hi everyone,
I had a new attorney speak to Fidelity National, and I've had a direct discussion with Mississippi Valley Title. The consistent feedback is that they used to provide coverage, but will no longer offer coverage if the tax deed is less than 3 years old, even if you have the quiet title.
@Denise Evans I know I've sold tax deeds that were less than 3 years old in the past, but I'm going nowhere with this one. Do you know specific contacts that will insure? My attorney is being very flexible, but he doesn't know who else to contact.
@Tyson Begly, I target properties for which I can obtain quitclaim deeds from former owners, thereby obviating the need for quiet title lawsuits. I'm sorry, I can't tell you any title companies. Just keep calling around.
@Tyson Begly, I target properties for which I can obtain quitclaim deeds from former owners, thereby obviating the need for quiet title lawsuits. I'm sorry, I can't tell you any title companies. Just keep calling around.
curious as to the strategy to get properties where you can obtain quitclaim deeds. I’ve talked to heirs to agree to a QC but they change their mind at signing time. Half the owners/heirs never respond to any communication. Auction and OTC seems a bit hit or miss sometimes even when amount owed is fairly high. Is it a particular area, state of the property, amount owed, etc? Thanks
@Tai Bhattad
Half the owners/heirs never respond to any communication. Auction and OTC seems a bit hit or miss
Nothing works all the time. It is a numbers, game you keep trying. My favorite marketing quote is "Nothing works everywhere, everything works somewhere"
You could paraphrase that to say
"Nothing works any time, everything works some times"
I acquired the tax certificate in 2017, and acquired the tax deed in 2020. The quiet title was completed January 2021...
Wanted to jump in and get insight on your QT experience - did you complete the QT yourself (DIY) or attorney? How much did it cost? How many months did it take. Did you file an ejection suit when you got the certificate?
I thought QT would fall under the eviction moratorium and the same with ejection in 2020 so I’ve been hesitant to file QT coupled with looking for more guidance before I try DIY.
@Tai Bhattad I strongly suspect that if you do a quiet title yourself, it will not do any good. A title insurance company would not feel comfortable that you did it correctly. This is exactly why they don't like to insure tax deeds. They don't trust that the city or county did the tax foreclosure properly.
@Tai Bhattad I strongly suspect that if you do a quiet title yourself, it will not do any good. A title insurance company would not feel comfortable that you did it correctly. This is exactly why they don't like to insure tax deeds. They don't trust that the city or county did the tax foreclosure properly.
From what the original poster is saying... it’s more of policy based on timing of holding the deed for 3 yrs (AL) rather than potentiel issues from DIY. A few folks on BP mentioned no problem in their respective states with title insurance after a DIY QT. A few folks have also noted an attorney-completed QT still didn’t guarantee title insurance. I would still welcome anyone’s experience in AL for a DIY QT ( or attorney helped) as it’s also noted attorneys in AL are ‘not’ knowledgeable of Tax sales & QT based on AL statues and they are a challenge to find.
@Tai Bhattad, @Ned Carey, it makes no difference if you hired an attorney to do the QT or did it yourself, if you have a valid QT order.
When I first created my QT forms, I downloaded forms from reputable online services and also obtained forms from attorney friends of mine. Those were the basis of most of the QT complaints filed in courts over the past 20-30 years. What a mish-mash of confusing forms that blithely included in-personam and in-rem language and statute cites in the same complaint. Not as alternative counts, but just as if there were no difference. They also did not track the requirements of the statutes as far as allegations in the complaint. Notice pleading is not sufficient, there are specific things that have to be in that complaint for the court to have jurisdiction. They did not include important requirements from the appellate decisions, such as the magic words that plaintiff was in "peaceable" possession as opposed to some other language used in the forms. None of them included specific recitals regarding what steps the plaintiff took to locate unknown possible owners, as required by the in-rem statutes. So, saying an attorney-filed QT lawsuit has more credibility with underwriters is greatly misplaced confidence in the vast majority of attorneys who use recycled forms rather than drafting pleadings from scratch.
The underwriter is going to check to see if the court had jurisdiction to enter the order. That is all they are entitled to check. The judge is the final decision maker if there is jurisdiction and there was no appeal after the decision. Pro se or attorney filed, it's all the same. For an underwriter to deny coverage based on his/her own opinion regarding the correctness of the order after jurisdiction was gained and no appeal filed, would open that insurance company up to a lawsuit for damages by the title insurance applicant. Judges do not take kindly to people invading what is the exclusive province of the judiciary.
@Tai Bhattad, @Ned Carey, it makes no difference if you hired an attorney to do the QT or did it yourself, if you have a valid QT order.
When I first created my QT forms, I downloaded forms from reputable online services and also obtained forms from attorney friends of mine. Those were the basis of most of the QT complaints filed in courts over the past 20-30 years. What a mish-mash of confusing forms that blithely included in-personam and in-rem language and statute cites in the same complaint. Not as alternative counts, but just as if there were no difference. They also did not track the requirements of the statutes as far as allegations in the complaint. Notice pleading is not sufficient, there are specific things that have to be in that complaint for the court to have jurisdiction. They did not include important requirements from the appellate decisions, such as the magic words that plaintiff was in "peaceable" possession as opposed to some other language used in the forms. None of them included specific recitals regarding what steps the plaintiff took to locate unknown possible owners, as required by the in-rem statutes. So, saying an attorney-filed QT lawsuit has more credibility with underwriters is greatly misplaced confidence in the vast majority of attorneys who use recycled forms rather than drafting pleadings from scratch.
The underwriter is going to check to see if the court had jurisdiction to enter the order. That is all they are entitled to check. The judge is the final decision maker if there is jurisdiction and there was no appeal after the decision. Pro se or attorney filed, it's all the same. For an underwriter to deny coverage based on his/her own opinion regarding the correctness of the order after jurisdiction was gained and no appeal filed, would open that insurance company up to a lawsuit for damages by the title insurance applicant. Judges do not take kindly to people invading what is the exclusive province of the judiciary.
Title search, examination and underwriting is the analysis of the chain of title and assessment of risk and the willingness to accept, or reject as the case may be, identified risk. It is not, in any sense, the practice of law. A good search and exam will include a review of any pleadings that appear to affect the title to the land being insured and identifying what appear to be defects in the proceedings. In my experience judges are people and can fall into a habit of simply signing what's put in front of them despite glaring inconsistencies. It's the searcher/examiner's job to identify those inconsistencies and the underwriter's job (the person not the company) to decide whether to accept the risk or not and if not decide what the underwriter (the company not the person) will accept to authorize the issuance of a policy and what exceptions will need to be included.
@Peter Walther, respectfully, judges do make mistakes, but unless overturned on appeal or made without jurisdiction, their decisions are final and are law. For an underwriter to invade that and determine a judge made a mistake is wrong. Judges hear and see all of the evidence, have an opportunity to observe the demeanor of the witnesses, etc. Even an appellate court will not invade those provinces of the trial judge, and will overturn only for mistakes of law. In addition, there are complicated rules regarding who has the burden of proof, and when that burden shifts. I know of no lay persons, and very few attorneys, who are able to successfully navigate those issues. As one recent example, the Stiff v Equivest decision regarding Alabama tax sales was most likely a failure of proof issue in a particular lawsuit, and not the "end of the world" state-wide decision most people thought. On the other hand, it might have been a global decision. Nobody would know for sure until an appellate court spoke on THAT issue.
An underwriter should legitimately investigate whether the court had jurisdiction, whether timely notice of appeal was filed, and whether the time has expired for post-trial motions. Perhaps for an in-personam lawsuit, the underwriter should see if there are more potential claimants than just the ones named in the lawsuit. More than that invades the province of the judiciary.
@Peter Walther, respectfully, judges do make mistakes, but unless overturned on appeal or made without jurisdiction, their decisions are final and are law. For an underwriter to invade that and determine a judge made a mistake is wrong. Judges hear and see all of the evidence, have an opportunity to observe the demeanor of the witnesses, etc. Even an appellate court will not invade those provinces of the trial judge, and will overturn only for mistakes of law. In addition, there are complicated rules regarding who has the burden of proof, and when that burden shifts. I know of no lay persons, and very few attorneys, who are able to successfully navigate those issues. As one recent example, the Stiff v Equivest decision regarding Alabama tax sales was most likely a failure of proof issue in a particular lawsuit, and not the "end of the world" state-wide decision most people thought. On the other hand, it might have been a global decision. Nobody would know for sure until an appellate court spoke on THAT issue.
An underwriter should legitimately investigate whether the court had jurisdiction, whether timely notice of appeal was filed, and whether the time has expired for post-trial motions. Perhaps for an in-personam lawsuit, the underwriter should see if there are more potential claimants than just the ones named in the lawsuit. More than that invades the province of the judiciary.
As I wrote, determining whether and/or under what conditions an underwriter is willing to authorize the issuance of it's policy is the sole province of the company and is not the practice of law. The rules of law can be complicated of course, but then so is wiring a house for electricity without knowing what you're doing. Attorneys and judges are not oracles, law school and appointment to the bench does not imbue one with legal omniscient. Courts make mistakes all the time, that's why there's Appeal Courts and Supreme Courts and even they, in my humble opinion, make mistakes. While judgments can become final and unappealable, that may not prevent an aggrieved party from filing suit anyway, requiring the unwary underwriter to either defend the insured or pay the loss. Title insurance is intended to be based on risk avoidance much more than risk assumption. Recently there was a law passed in NY that provides a defendant's right to raise a lack of standing defense in a mortgage foreclosure cannot be waived raising the possibility of an attack on a non-appealable FJ. A title examiner best know how that potential needs to be dealt with when insuring title.
The Defense of Lack of Standing to Foreclose on a Home Loan Can No Longer be Waived in New York - Cullen and Dykman LLP (cullenllp.com)
Lack of standing is a jurisdictional issue, @Peter Walther, and lack of jurisdiction is never waivable. It can be asserted for the first time on appeal, and it can be asserted long after the lawsuit is over.
Let us agree that companies are allowed to do business with whom they choose, within the limits of the law (such as Fair Housing) and after weighing the risks of refusing to do business with the risks of taking on a risky customer. But, as I've posted in other threads on this issue, if one title company will not write insurance, that does not mean there is a fundamental issue with the state of your title. You should shop for somebody else.
I never claimed any business decision by a title underwriter was practicing law. I merely said that these issues are subtle, and not easily learned through Google or Nutshells or Gilberts or even through a long-ago course in law school on Civil Procedure or Real Property or Evidence or Insurance. Neither lay persons, nor lawyers, can legitimately go against a trial court's decision if that court has jurisdiction and the order is final and non-appealable. Declining to write title insurance is a legitimate business decision. Doing so because you think a quiet title order is flawed, but the appeal time has expired, is questionable.
If a company declined to write title insurance at all on any Alabama tax sale properties unless the owner had quitclaims from the former owners, that would be one matter and I think entirely acceptable. If it picked and chose based on its own opinion about whether the trial judge made a mistake of fact or law, then that is not acceptable and exposes the company to litigation from the applicant who was denied coverage. And, before you ask, "Under what theory could they sue?" I will tell you that I was a litigation attorney for many years representing banks, developers and large corporations who were sued for an incredible variety of grievances with a dizzying array of legal theories, both old and new, recognized and novel, and nothing would surprise me about the ingenuity of plaintiffs' lawyers.
So, that brings me back to a title company's risk assessment. Is the risk of a bad title insurance decision worth the risk of a lawsuit by an applicant denied coverage? Inasmuch as there is no bodily injury nor injury to outrage-protected interests in Alabama (dead bodies, the homeplace, etc.) when there is a denial of coverage, then if I had a title company and had such concerns, I'd probably come down on the side of turning down the applicant. BUT, I would do so with the understanding I am ignoring a lawful court order and making a risk assessment decision, not because I think the order is flawed and not worth the paper on which it is written. I would also do so only if I had clearly articulated guidelines about when to grant or deny coverage, and not based on each underwriters own personal understanding of the Alabama law for an exceptionally Byzantine area, and for which there are virtually no true experts in the entire State and nothing comparable in any other state.
@Denise Evans (and @Tai Bhattad) I am not disagreeing with you. I just want to clarify what I said. My point was not that a Quiet title done by an individual vs an attorney is less valid in the courts eyes, but is a higher risk in the eye of some insurance underwriters.
I agree 100% that different underwriters will have different guidelines they follow. I too have mentioned insurance shopping for a company that will insure a deal. We too do that on questionable deals and regularly use a small group that we know will insure our tax lien foreclosures.
All states are different and you seem to know AL better than anyone, including attorneys, For those reading along, each state is different and the subtleties can make a big difference. What Denise says may not apply to your state and what I say may not apply outside of MD.
So, that brings me back to a title company's risk assessment. . .
It's funny the longer you and Peter go back and forth the more it seems you agree. :-)
Lack of standing is a jurisdictional issue, @Peter Walther, and lack of jurisdiction is never waivable. It can be asserted for the first time on appeal, and it can be asserted long after the lawsuit is over.
Let us agree that companies are allowed to do business with whom they choose, within the limits of the law (such as Fair Housing) and after weighing the risks of refusing to do business with the risks of taking on a risky customer. But, as I've posted in other threads on this issue, if one title company will not write insurance, that does not mean there is a fundamental issue with the state of your title. You should shop for somebody else.
I never claimed any business decision by a title underwriter was practicing law. I merely said that these issues are subtle, and not easily learned through Google or Nutshells or Gilberts or even through a long-ago course in law school on Civil Procedure or Real Property or Evidence or Insurance. Neither lay persons, nor lawyers, can legitimately go against a trial court's decision if that court has jurisdiction and the order is final and non-appealable. Declining to write title insurance is a legitimate business decision. Doing so because you think a quiet title order is flawed, but the appeal time has expired, is questionable.
If a company declined to write title insurance at all on any Alabama tax sale properties unless the owner had quitclaims from the former owners, that would be one matter and I think entirely acceptable. If it picked and chose based on its own opinion about whether the trial judge made a mistake of fact or law, then that is not acceptable and exposes the company to litigation from the applicant who was denied coverage. And, before you ask, "Under what theory could they sue?" I will tell you that I was a litigation attorney for many years representing banks, developers and large corporations who were sued for an incredible variety of grievances with a dizzying array of legal theories, both old and new, recognized and novel, and nothing would surprise me about the ingenuity of plaintiffs' lawyers.
So, that brings me back to a title company's risk assessment. Is the risk of a bad title insurance decision worth the risk of a lawsuit by an applicant denied coverage? Inasmuch as there is no bodily injury nor injury to outrage-protected interests in Alabama (dead bodies, the homeplace, etc.) when there is a denial of coverage, then if I had a title company and had such concerns, I'd probably come down on the side of turning down the applicant. BUT, I would do so with the understanding I am ignoring a lawful court order and making a risk assessment decision, not because I think the order is flawed and not worth the paper on which it is written. I would also do so only if I had clearly articulated guidelines about when to grant or deny coverage, and not based on each underwriters own personal understanding of the Alabama law for an exceptionally Byzantine area, and for which there are virtually no true experts in the entire State and nothing comparable in any other state.
"As we have previously stated, lack of standing in a civil case is an affirmative defense, which will be waived if not raised in a timely fashion in the trial court." Greer v. ILL. HOUSING DEV. AUTHORITY, 524 NE 2d 561 - Ill: Supreme Court 1988.
"The issue of standing should have been raised as an affirmative defense before the trial court, and Krivanek's failure to do so constitutes a waiver of that defense, precluding her from raising that issue now." Krivanek v. TAKE BACK TAMPA POLITICAL COM., 625 So. 2d 840 - Fla: Supreme Court 1993.
"So we conclude that lack of standing is a defense which must be timely raised or else will be deemed waived." Harrison v. Leach, 323 SW 3d 702 - Ky: Supreme Court 2010.
"In neither document did they assert the affirmative defense of lack of standing. Based upon Harrison's holding, we must deem the McCords' failure to raise the defense of lack of standing as a waiver. Therefore, we shall not address the McCords' argument that Countrywide lacked standing." McCord v. COUNTRYWIDE HOME LOANS SERVICING, LP, Ky: Court of Appeals 2011.
"However, lack of standing is an affirmative defense which challenges the capacity of a party to bring an action—it does not challenge a trial court's subject matter jurisdiction. Suster at 77, citing State ex rel. Smith v. Smith, 75 Ohio St.3d 418, 420 (1996), and State ex rel. LTV Steel Co. v. Gwin, 64 Ohio St.3d 245, 251 (1992)." WATERFALL VICTORIA MASTER FUND LTD. v. Yeager, 2012 Ohio 124 - Ohio: Court of Appeals, 11th Appellate Dist. 2012.
"Generally, a lack of standing is an affirmative defense that can be waived through the failure to raise it in an answer or motion to dismiss." MATTER OF RENEE XX. v. JOHN ZZ., 51 AD 3d 1090 - NY: Appellate Div., 3rd Dept. 2008.
@Denise Evans (and @Tai Bhattad) I am not disagreeing with you. I just want to clarify what I said. My point was not that a Quiet title done by an individual vs an attorney is less valid in the courts eyes, but is a higher risk in the eye of some insurance underwriters.
I agree 100% that different underwriters will have different guidelines they follow. I too have mentioned insurance shopping for a company that will insure a deal. We too do that on questionable deals and regularly use a small group that we know will insure our tax lien foreclosures.
All states are different and you seem to know AL better than anyone, including attorneys, For those reading along, each state is different and the subtleties can make a big difference. What Denise says may not apply to your state and what I say may not apply outside of MD.
So, that brings me back to a title company's risk assessment. . .
It's funny the longer you and Peter go back and forth the more it seems you agree. :-)
Very true, except for the last line.
I see. In Alabama, the lack of standing defense has been judicially construed as typically more accurately defined as a lack of jurisdiction defense and very few lack of standing assertions are accurately pled. So, a lack of standing defense that might otherwise be waivable is almost always more accurately a non-waivable lack of jurisdiction. I think our problem, @Peter Walther, is differences in the law among different states.
@Ned Carey, you are right! That's the value in conversations, so that people can start with seemingly divergent views and gravitate towards clarification and understanding and consensus. I wish Congress could follow our example:(