Break on the chain of title

Rental Property Investor · Houston, TX · Member since 2019 · 184 posts · 147 votes

Hi BP family. So one of my properties that I have under contract has a break on the chain of title and it goes so far back that the seller does not even know how to get to those people to sign a quit claim deed. He doesn’t even know if they are even alive. My question is what have you done for this situation? Is quit claim deed the only avenue? Who do I need to be talking to? A real estate attorney? An investigator to track those people? How costly is it? This is the first time something like this happens to me so I will really appreciate your feedback

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Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

The owner(s) of the interest (or his/her/their heirs or personal representatives) will need to execute a confirmatory deed which fixes the chain. Without seeing a title report, who knows what percentage of ownership this concerns... 12.5% 25% 50% 100%? Either way, no title insurer is going to insure over an issue like this.

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Jared Wilson
Burleson, TX · Member since 2009 · 37 posts · 33 votes
6y
@Tom Gimer
This will be my final reply Tom. Your mind is closed and you think you know all. I'm only replying now so that subsequent readers of this forum do not have false information.
I have direct, personal experience that directly contradicts your opinion on this matter
As I shared several posts earlier, I experinced a "break" in the chain of title on a particular deal. There was a quit claim deed between a son and daughter 3 links back in my chain of title. The first title company didnt like this. The way I got it fixed was finding a different title company with a different title underwriter who didnt care about the quit claim deed issue and was willing to close.
So obviously that 2nd underwriter had a different opinion that the "break" in the chain of title was ok and we closed. Thus all things are not black and
white, and cut and dry.
So my original suggestion to the OP was to go duplicate what I did as it may be an easier fix.
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Greg H.Pro Member
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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
6y
Originally posted by @Tom Gimer:
@Jared Wilson Breaks in the chain of title are not subject to opinion... either there is a chain or there isn’t. In this case there isn’t.

As a buyer you don’t want to find a new underwriter... you want the chain fixed or the same problem will prevent your future sale.

Most of the time we are in agreement. While fixing the issue is the best scenario obviously, if you could find an underwriter to insure once, they would be inclined to insure again as the exposure is already there. Better to get 2 premiums instead of 1 right?
I do not subscribe to not informing of the issue upfront however
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
6y
@Jared Wilson The situation you described as your direct personal experience on the topic was not a break in the chain at all, but simply the existence of a quitclaim deed in the chain. Big difference.

For those who bother to read the original fact pattern, there is a known title issue here. And to my knowledge there are only two ways deal with a known title issue: (1) fix it/have it fixed before closing or (2) buy subject to it.
As to your advice to OP on whether to disclose the title issue to the next insurer: "No definitely not." Read your title policy... you can't hide the problem from title company #2 and realistically expect things to turn out well.
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