Cloud on Title - HELP! - Quite Title Action

5 Replies

I recently put together a wholesale deal. Yesterday, five days before the closing, the title company contacted me and said that there is an issue with the chain of title. Here's the story:

In 1965 person A sold the property, warranty deed, to person B, and his wife #1.

In 1968 person B and his new wife #2 sold the property to person C. 

I am attempting to put together the deal with person C and a new buyer.

The title company is telling me that they need written documentation that wife #1 either died during ownership or written documentation of wife #1's "elimination of interest". This is obviously from 40+ years ago, and this person has been long gone, and hasn't expressed interest in the property in almost a half-century. The title company told me that a copy of the original title policy would be sufficient as well, but that's no where to be found. I am really hoping that a court-sanctioned action for quiet title is not required.

Any help on the matter would be appreciated. The seller does have a lawyer involved but I haven't heard from him yet (it's the weekend). 

Here's the secret:

Ask the advisory title officer what you can offer to make them feel comfortable with underwriting the file.

This may be indemnification or a surety bond. 

Remember that title companies are in the business of selling insurance. Selling, as in 'someone wants to make a commission'. Insurance, as in 'We'll take your money and offer you an umbrella but we'll take us away when it rain. We want 0% risk.'

There are other title companies, too.

Thanks for the advice, hopefully I can work something out.

Deal got closed, no problems, by simply calling a few title companies and finding one that didn't think the cloud was truly a risk. Thanks Rick!

Awesome news.  Have commercial lot in Albuquerque coming to market soon with similar issues. Was told I needed to go to court to remove cloud before selling.

Great advice @Rick H.   I think this type of thinking applies to several arms of RE investing (e.g., finding conventional financing)