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Protect your investment: clearing a cloud on title

On Behalf of | Sep 30, 2021 | Title Insurance Litigation

Real estate law is complex. Whether you are a buyer or seller, the title to property in New Jersey is subject to various liens and other legal obstacles that can interfere with the sale. Understanding some of the most common issues and options for handling them can help you minimize the risk that comes with real estate investment.

According to Policy Genius, a cloud on title is an unresolved issue pertaining to the ownership of a particular piece of property.

What is a quiet title action?

A lawsuit or legal proceeding that can help clear a cloud on title is a quiet title action. It can resolve outstanding issues regarding the ownership of property. If you are a real estate investor, you may use a quiet title action after purchasing property in a tax deed sale. Although the sale dissolves the prior lender’s interest in the property, the claim remains.

When is a quiet title action used?

Confusion relating to ownership can arise when real estate transactions occur without a thorough document review before the sale. A quiet title may also occur in the following situations:

  • Use of an easement without a recorded description
  • Error in the legal description that leaves a question regarding the amount of property owned
  • Discovery of survey errors
  • Documented problems that may include an old lease or a failure to execute a mortgage reconveyance after payment
  • Transfer of deed occurred under coercion or fraudulent conditions
  • Discovery of title insurance errors

Real estate disputes can derail your plans for the property you purchase or sell. A quiet title action may take six to eight weeks and can be costly. Depending on the cause of the title dispute, you may have other options for clearing a cloud on the title situation.