Updated almost 4 years ago on . Most recent reply
Can a Quiet Title Action solve this scenario?
Scenario: Elderly owner dies and HOA forecloses on the property. The property has no mortgage lien and owes at least 2 years of real estate taxes. If I bid and win this foreclosure auction, pay off the taxes, would it be safe to say the property is now mine to sell to another, or would a quiet title action make it more sure?
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If it's not specifically stated sold free and clear, then it's not. As to liens, you can check down at the county clerks office, and nowadays, public records are available online. Quiet title action does not obliterate current liens, it's usually for very old liens where releases are not file, and lienholders cannot be found. Reasons are the lienholder died, if it is a person, or the company or the bank no longer exists.
For condos, check the CC&R's to see if you plan to rent it out, if the HOA allows it, and what the rule's for that are.
Often, there is a reserve price, if you do not meet it, the bid is rejected. If it's an absolute auction, the lowest bidder by default wins, though lender banks can go in and place bids if bids are too low and below the mortgage. There was an auction for a condo unit where $125K units sold at auction for $40K which is what I got it for but one time they held an auction for a foreclosed unit where there is no reserve price indicated, was poorly advertised, and no one showed up except the owner and his twin brother. The owners twin brother realizing what happened, place a bid for something like $3K to $4K, because that's what he had available on his credit card, and it's the winning bid. Everyone was upset that a $125K condo sold at $3K and the HOA had a rule passed where they can match such bids in the future.