Quiet Title vs Tax Title Services
Frankfurt Am Main, Hessen · Member since 2016 · 13 posts · 1 vote
Hello all,
Does anyone have any experience in (or knowledge) of the difference between a quiet title action and using Tax Title Services (or a similar service)?
From what I can tell, Tax Title Services is partnered with a few law firms/title search companies across the nation and basically "vouches" for all of the paperwork of your property (which you acquired via a tax sale/lien) being good to go. From there, the title company (the one partnered up with Tax Title Services will issue you title insurance).
Is quiet title basically the same thing (except done via a legal process), but would allow you to get title insurance from all title companies (minus the speed from the above method?
Thanks!
George
It was not hard at all. Some I have sent a letter to after finding their new address from a recent speeding ticket, another I found them via Facebook. All I offered them $200 for their time to sign QCD and got it notarized at a bank. Recently I tracked down a guy and got him to sign it over before he lost it. Then I paid the taxes and got the 10k back that I had paid for the tax lien.
I have never done a Quiet Title. I have cleared them myself or sold a few to another investor for cash with a QCD. Most I keep and rent for forever with just my Tax deed. No need to clear these if I just want to keep them for passive income.
A quiet title action (at least in Georgia) is getting the relevant Court to order that your title is good, based on you correctly following any relevant barment procedures. These actions are not uniform across states, and neither are the barment requirements. I've handled many quiet title actions, including at least one to go back behind Tax Title Services and correct errors, which resulted in that particular investor having wasted some money.
Also, always keep in mind that "clear title" legally does not always equate with "insurable" or "marketable," and many title insurers will require a full quiet title, rather the insure based on Tax Title Services.
@Sam Bagwell, just FYI, no Alabama title company will insure title without a quiet title order that is final and non-appealable AND they order up a copy of the court file to review and make sure there were no defects that robbed the court of jurisdiction. There are a surprising number of quiet title lawsuits that sue for ejectment and quiet title, which automatically kills jurisdiction because you must have possession before you can quiet title in Alabama, by statute. Other similar things rob the court of subject matter jurisdiction. There might be incomplete personal jurisdiction issues if the newspaper notices were not run properly, and similar matters. It generally adds an extra 30 days to the closing time period for court file review, and then you might get bad news at the end.
+1 @Denise Evans she is an expert in Alabama. Erica you asked the same question in another post. I recommended you contact attorney @Gregory Stanley to help you work through this as this sounds like a complicated situation for a beginner.
Denise,
I unfortunately used Tax Title Services before I found you as a resource. It was for two large parcels of farm land that I’ve had in my possession for a long time now (Calhoun County, Al tax sale was 10+ years ago). Using TTS, I was able to purchase Title insurance via Boston Title Agency, backed by Westcor Land Title Insurance Company. Now that I am selling the land, no Alabama title insurance company will insure it. I have purchaser ready to buy the land, but our closing lawyer scared the buyer when he told them TTS did not do the process correctly or legally.
The Westcor Owner’s Policy of Title Insurance states among other things that it covers the following:
We filled a claim with Westcor, and they offered to transfer the policy to the buyer, and would guarantee any problems that the buyer would run into in the future, but the buyer and I both think that is just kicking the can down the road. I’m sure he will run into the same problems if he decides to sell in the future.
The lawyer about to start quiet title lawsuit, but that just means more money spent on my end.
To complicate the situation further, the closing Lawyer found that there was no record of a deed from the owners of the property prior to the tax sale, only a lease sales contract that never resulted in a deed. (Break in the chain of title) We have a work around for this issue, as we have found the original owner who sold/ signed the lease sales contract to the people that lost it in the tax sale, and she is willing to sign a quitclaim deed. It just really bothers me that TTS never saw that as an issue.
What is the right path? My thoughts are to continue with the quiet title lawsuit, and then sue/file a claim with Westcor to reimburse my costs. The costs are adding up, and I’m on a very short timeline, as I need these fund to purchase another property (family land) asap.
Denise,
I unfortunately used Tax Title Services before I found you as a resource. It was for two large parcels of farm land that I’ve had in my possession for a long time now (Calhoun County, Al tax sale was 10+ years ago). Using TTS, I was able to purchase Title insurance via Boston Title Agency, backed by Westcor Land Title Insurance Company. Now that I am selling the land, no Alabama title insurance company will insure it. I have purchaser ready to buy the land, but our closing lawyer scared the buyer when he told them TTS did not do the process correctly or legally.
The Westcor Owner’s Policy of Title Insurance states among other things that it covers the following:
We filled a claim with Westcor, and they offered to transfer the policy to the buyer, and would guarantee any problems that the buyer would run into in the future, but the buyer and I both think that is just kicking the can down the road. I’m sure he will run into the same problems if he decides to sell in the future.
The lawyer about to start quiet title lawsuit, but that just means more money spent on my end.
To complicate the situation further, the closing Lawyer found that there was no record of a deed from the owners of the property prior to the tax sale, only a lease sales contract that never resulted in a deed. (Break in the chain of title) We have a work around for this issue, as we have found the original owner who sold/ signed the lease sales contract to the people that lost it in the tax sale, and she is willing to sign a quitclaim deed. It just really bothers me that TTS never saw that as an issue.
What is the right path? My thoughts are to continue with the quiet title lawsuit, and then sue/file a claim with Westcor to reimburse my costs. The costs are adding up, and I’m on a very short timeline, as I need these fund to purchase another property (family land) asap.
Did Westcor deny liability or just make the offer to reinsure? If they didn't deny and you elect to pay out of pocket to cure the defect don't expect them to reimburse you after the fact. Title policies don't work that way. If they did deny, what was the basis for the denial?
@Paul Walther, They have only offered to reinsure so far.
So, is this a problem that is made bigger because of it being Alabama?
I have a couple of deeds I wanted to take through the Tax Title Services process, but a couple posts give me pause.
Is the company good for anything?
@Charles Edwards, I don't know if the company is any good or not. I do know in Alabama you can't get title insurance until you quiet title. If TTS says they have a title company that will write insurance after completing their program, I'd want to know (1) are they licensed to write insurance in Alabama and (2) Who is it. Then I'd check with some local closing companies where your property is located and see if those attorneys will accept title policies written by that company.
@Paul Walther, They have only offered to reinsure so far.
Sorry for the delay in getting back with you. Did you explain to the Westcor rep that your buyer is not willing to accept a new Westcor policy and no other underwriter is willing to authorize the issuance of it's policy. Therefore you believe you have a loss recoverable under your Westcor policy and demand they immediately take steps to cure the defect or pay you your loss?
@Peter Walther The plan is to have my lawyer handle the quiet title and ask Westcor to cover the cost. Bottom line is I have to satisfy my buyer, whether I can recover the addition costs or not. I'm just waiting to see where the final costs land. I don't want to ask/settle for less than it will cost in the end(since it's still in process). Plus each time the lawyer representing me and my buyer reaches out to Westcor it costs me $$. Between Covid and Christmas, everything had been moving really slow. It's starting to move forward now (The lawyer is filing the quiet title claim now). I have a committed and patient buyer thank goodness! It has been an extremely frustrating process. It wouldn't be near as stressful if I didn't need the funds for the other property I'm purchasing (classic save the family farm story)
Ok, but as I wrote earlier, I wouldn't expect Westcor to reimburse you. Also, you don't need an attorney to deal with Westcor, you're the insured. I sometimes found it easier to deal directly with the Insured so nothing got lost in translation and I could manage the Insured's expectations.
Hi John,
You are right the QUIET CLaim Process is $$$$$!. So I am hoping I can connect with the previous owners as you have suggested. I have 2 tax properties here in COlumbia SC. Do you generate your own quit deed document and have previous owner sign and notarized, or does an attorney generate the document?
After you get the quit title deed signed and recorded, what next? You can then obtain title insurance? From whom? Attorney or title company?
Thanks in advance,
Tara
I am new at this and believe I did not do my due diligence before I purchased this property. I am dealing with a dormant mortgage in Alabama that has been written off. I have located the mortgage company. They have refused to do anything that will release the lien on the property. Does anyone have any ideas on how to handle this or is a quiet title action my only recourse? I have already renovated the property and have a buyer. I need a fast solution.
Instead of these I pick option C.
I track down previous owner/s and get them to sign a Quit Claim deed. If there was a mortgage I ask for a mortgage release. Then I can get title Insurance.
This is much cheaper and much quicker.
what is your method for title search to be sure you have all previous owners/liens?
Instead of these I pick option C.
I track down previous owner/s and get them to sign a Quit Claim deed. If there was a mortgage I ask for a mortgage release. Then I can get title Insurance.
This is much cheaper and much quicker.
what is your method for title search to be sure you have all previous owners/liens?
I sometimes research it myself on the Register of Deeds site or I get an attorney to do a title search.
Thank you for the response,
Two questions.
1- do I need ALL past owners to sign one or just the last owner who the county took it from?
2- if I get him or them to sign quit claim deeds does that effectively cancel out the redemption period and allow me to proceed with selling asap?
It was not hard at all. Some I have sent a letter to after finding their new address from a recent speeding ticket, another I found them via Facebook. All I offered them $200 for their time to sign QCD and got it notarized at a bank. Recently I tracked down a guy and got him to sign it over before he lost it. Then I paid the taxes and got the 10k back that I had paid for the tax lien.
I have never done a Quiet Title. I have cleared them myself or sold a few to another investor for cash with a QCD. Most I keep and rent for forever with just my Tax deed. No need to clear these if I just want to keep them for passive income.
@John Underwood, So can we get what we paid(bid) during the tax lien auction if the original owner signs QCD after I get the tax deed(after redemption period)? Just got 2 indiana properties after redemption period but if I can get back my bid for each of them that will be awesome since the properties are not worth much apparently.
It was not hard at all. Some I have sent a letter to after finding their new address from a recent speeding ticket, another I found them via Facebook. All I offered them $200 for their time to sign QCD and got it notarized at a bank. Recently I tracked down a guy and got him to sign it over before he lost it. Then I paid the taxes and got the 10k back that I had paid for the tax lien.
I have never done a Quiet Title. I have cleared them myself or sold a few to another investor for cash with a QCD. Most I keep and rent for forever with just my Tax deed. No need to clear these if I just want to keep them for passive income.
@John Underwood, So can we get what we paid(bid) during the tax lien auction if the original owner signs QCD after I get the tax deed(after redemption period)? Just got 2 indiana properties after redemption period but if I can get back my bid for each of them that will be awesome since the properties are not worth much apparently.
No you can't. If you can get them to sign over the property before they lose it and you have the lien, then yes you pay the back taxes as the new owner and redeem the lien so that you get your lien purchase amount back plus interest.