What Is Quiet Title?
Quiet title is a lawsuit filed to establish ownership of real estate when ownership is in question. Real estate owners want to ensure that they have a clear title, meaning that there are no liens or levies against the title and no disputes over the property's ownership. These possible problems are known as clouds on the title and can be resolved by action to quiet the title. When you quiet the title, you are insuring that once and for all, there is only one clear owner of the title.
BREAKING DOWN Quiet Title
After a successful quiet title, a clear title is established and is required to close a real estate transaction and is established by title companies, who do a title search to confirm a property's legal owner and check for claims against the property. Title insurance protects the interest in a property against legal defects since title searches are not infallible.
To initiate an uncontested quiet title, a homeowner may file what is known as a quiet title action, which is a specific legal process to determine the clear ownership of a property. The quiet title action acts as a lawsuit of sorts from the individual or party who is claiming to be the sole owner of the property against all others who claim to have a stake in it. Once the proceeding has gone through and the purported owner prevails in the quiet title action, the title is considered close and quiet for that owner and no further challenges to the title can be leveraged.
An Example of a Quiet Title
As an example of a quiet title, there could be a Contractor whose primary job is flipping a house, meaning that Contractor A purchases a home for a low price, makes necessary home improvements, and then turns around and sells the home for a profit. In order to make a profit off of flipping homes, it’s usually a house that has been foreclosed on or previously owned by someone who was not able to successfully own the house. Thus, the home may have liens against the house or unpaid debts.
To make sure that the buyer can own the home free and clear when purchasing, the Contractor will bring a quiet title action to court to essentially bump up their ownership of the home above other previous owners. The action will be published publicly, usually in a newspaper or other public publication, which allows any other contested owners to come forward and make their claim to the property.
Once sufficient time has passed or other owners have been dealt with accordingly and there is one clear owner, the title is considered quiet.