Frequently Asked Questions to Quiet Title Issues
What does it mean to have title to real property?
Having title to real property denotes your ownership interest. An ownership interest in real property is the legal right to control, possess and dispose of property.
What is a title?
A title is legal evidence of a person’s ownership rights in real property. For example, a deed to a house is evidence of title to real property.
What is a deed?
A deed is a legal instrument which conveys an interest in real property. All valid deeds must (at a minimum) be in writing, signed by the grantor, reasonably identify the parties and land, and be signed by the grantor.
What is a chain of title?
A chain of title is the ownership history of a parcel of real property, from its first owner to the present owner. It is all the transactions recorded in the register of deeds in such a manner that a searcher could reasonably find it.
What is a break in the chain of title?
An absence or gap in the chain of title which is not recorded. A break in the chain of title constitutes a title defect and renders the title to real property unmarketable.
What is a quiet title?
A lawsuit to extinguish or eliminate the interests of others in real property and establish the plaintiff’s superior interest in the property.
What is title insurance?
A title insurance policy insures that a good record title of the property exists as of the policy’s date and promises to defend the record title if litigated. Title insurance protects only the person who owns the policy (usually either the owner of the property or the mortgage lender).
What is an owner’s policy of title insurance?
An agreement from a title insurer to indemnify a purchaser of real property against loss arising from a defect in title excepting those listed as exceptions to the policy or excluded from the scope of coverage.
What is a mortgage policy of title insurance?
If a mortgage is obtained in order to purchase property, nearly all lenders require that the home buyer purchase the lender’s title insurance policy for an amount equal to the loan. A lender’s policy is issued to a mortgage lender. The policy provides the lender protection from covered losses arising from any previously unknown defects in the title that have become known only after the insured property has been financed. The lender’s insurance policy will remain in effect until the amount financed has been repaid, the property is resold or until refinancing has occurred.
What is a title insurance company?
A company that issues title insurance (through an underwriter) to purchasers or lenders and performs other real estate related services such as abstracting (analyzing title for defects) and acting as the buyer’s and seller’s agent for closings on real property (preparing the closing documents, deed and receiving and disbursing the funds).
Is title insurance the same as homeowners insurance?
No.
Title insurance protects against loss for defects in title to the property. For example, if there is an outstanding mortgage or other lien against your property which was not discovered at the time of purchase.
Homeowner’s insurance protects against actual physical damage to your property or against loss for someone who is injured on your property.
When is title insurance needed?
Always if you want to ensure you have marketable title and your ownership interest is protected.
What is a title search?
A search of the records in the register of deeds of the county in which the real property is located to determine 1) who has an interest in the property and 2) what, if any, city or state regulations of encumbrances exist as to the property.
What is a title commitment?
A title commitment is the form signed by the title insurance company and the insured which tells you what the title insurance company needs in order to insure the lien of the lender’s mortgage and what the title insurance company will not insure against.
Why is it called quiet title?
The action is called quiet title because the purpose of the lawsuit is to establish a party’s title to real property against anyone and everyone, and thus “quiet” any challenges or claims to the title.
What is a Quit Claim Deed?
A Quit Claim Deed conveys all right, title and interest from the grantor to the grantee. No covenants of title (warranties) are included or implied.
What is a Warranty Deed?
A deed which guarantees certain title assurance. There are typically six types of covenants which are included in a general warranty deed.
Covenant of Seisin – The Grantor promises to have the estate she purports to convey.
Covenant of Right to Convey – The Grantor promises that she has the authority to make the grant.
Covenant Against Encumbrances – The Grantor promises that no physical or title encumbrances are on the property.
Covenant of Quiet Enjoyment – The Grantor promises that the grantee will not be disturbed in possession by a third party’s lawful claim of title.
Covenant of Warranty – The Grantor agrees to defend against reasonable claims of title by a third party.
Covenant for Further Assurances – Grantor promises to perform acts reasonably necessary to perfect title conveyed.
What is a tax title property?
Parcels offered for auction at tax foreclosure sales, but not sold, are deeded to the County. These parcels are called “Tax-Title.” They may still be purchased from the County through a process called a tax-title sale.
What is the tax forfeiture process?
The tax forfeiture process is a process where the county takes steps to divest a property owner of its real property for the failure to pay real property taxes.
When does a property go to tax forfeiture?
Parcels are forfeited to the county treasurers when the real property taxes are in the second year of delinquency.
Why does a property get tax forfeited?
Property’s are forfeited as a result of the failure to pay real property taxes.
What is a delinquent property tax?
Real property tax delinquency entails a three-year forfeiture and foreclosure process in Michigan. Parcels are forfeited to the county treasurers when the real property taxes are in the second year of delinquency. Real property taxes which remain unpaid as of March 31 in the third year of delinquency are foreclosed upon by the Foreclosing Governmental Unit (FGU). The FGU is responsible for inspecting forfeited property, providing due process notifications and subsequent disposition of the tax foreclosed property.
What is a legal description?
A formal description of real property; described in sufficient detail to permit a particular piece of land to be located and identified.
What is the tax identification number?
A number used by the government to identify a property for tax purposes.
What is the commonly known as address?
The street name, building number, city, state and zip code of the real property. For example, 414 W. Fifth St., Royal Oak, MI 48067
What is a grantor?
One who conveys property to another (giving).
What is a grantee?
One to whom property is conveyed (receiving).
What is a gap in title?
A gap in title is when there is a break in the chain of title that cannot be explained at first glance. For example, the chain of title shows Person A transferring property to Person B in 1980. Then in 2000, the chain of title shows Person C transferring to Person D. Because there is no recorded conveyance from person B to person C, this is the “gap in title.”
What is an encumbrance?
Generally, mortgages, liens, restrictive covenants, easements, and significant encroachments are ‘encumbrances’ which render title to property unmarketable. An easement which is beneficial, visible, or known to the buyer does not impair the marketability of title.
What is a lien?
A legal right or interest that a creditor has in a debtor’s property usually lasting until the debt or duty has been satisfied. For example, a property tax lien may attach to real property when you do not pay your real property taxes.
What is a mortgage?
An interest in real property given as security for a debt by the mortgagor (debtor) to the mortgagee (creditor) giving the mortgagee specific rights in the mortgaged property if the mortgagor fails to pay the underlying debt.
What is a lien theory state?
Michigan is a lien theory state meaning that a mortgage resembles a lien or an encumbrance on the property, so that the mortgagee (lender) acquires only a lien on the property and the mortgagor (borrower) retains both legal and equitable title unless a valid foreclosure occurs. In a lien theory state, if a borrower defaults or fails to meet the terms of the mortgage, the lender may go through formal foreclosure proceedings in order to gain legal title to secure repayment of the loan.
What is a note?
A written promise by one party to pay money to another party. It serves as the principal evidence of the debt for a mortgage.
What is the difference between a note and mortgage?
A note represents the debt, the promise to pay money.
A mortgage secures repayment of the debt by placing a lien on the real property. If the debt is not repaid according to the terms of the note, the mortgage can be foreclosed upon, meaning the lendor can take actions to force the sale of your home and use the proceeds to pay back the debt owed.
What is a land contract?
A contract between a seller and buyer of real property in which the seller provides financing to the buyer to purchase the property for an agreed-upon purchase price and the buyer repays the loan in installments. Under a land contract, the seller retains the legal title to the property, while permitting the buyer to take possession of it for most purposes other than legal ownership. The sale price is typically paid in periodic installments. When the full purchase price has been paid including any interest, the seller is obligated to convey legal title to the property to the buyer.
What is a vendor?
A vendor is the seller under the land contract.
What is a vendee?
A vendee is the buyer under the land contract.
What happens if the vendor does not convey a deed to the vendee?
A quiet title can be filed to compel the vendor to convey title to the vendee.
What happens if a mortgage is not discharged after is has been paid in full?
A quiet title can be filed to compel the mortgagee to discharge a mortgage.
Who is responsible for discharging a mortgage?
The mortgagee or lender.
What is joint tenancy?
A tenancy with two or more co-owners who take identical interests simultaneously by the same deed and with the same right of possession. Each joint tenant has a right of survivorship to the other’s share. So if there are two joint tenants and one dies, the other co-tenant automatically takes the deceased’s share and then owns 100% of the property.
How is a joint tenancy terminated?
The right of survivorship may be severed, and the estate converted to a tenancy in common by: a conveyance by one joint tenant; agreement of joint tenants; murder of one co-tenant by another; or simultaneous deaths of co-tenants. A joint tenancy can be terminated by partition (voluntary or involuntary).
What are tenants by entirety?
Tenants by entirety are husband and wife who take identical interests simultaneously by the same deed and with the same right of possession. Tenants by Entirety have a right of survivorship; so, when one spouse dies the property automatically passes to the surviving spouse.
Neither husband nor wife acting alone can convey or encumber an interest in land held as tenants by the entirety. When conveying property to husband and wife, Michigan presumes a tenancy by the entirety. Thus, the only way to avoid this co-ownership is to convey the property using specific language, “to Husband and Wife as joint tenants and not as tenants by the entireties.”
How is a tenancy by the entirety terminated?
The right of survivorship may be severed by death, divorce, mutual agreement, or execution by a joint creditor.
What are tenants in common?
Tenants in common are co-tenants where each co-tenant owns an individual part of the property, with a right to possess the whole property. There is no right of survivorship; so, if one owner dies, that owner’s interest in the property will pass by inheritance to that owner’s devisees or heirs, either by will or intestate succession.
What is a dower right?
A surviving wife must elect whether to take under her husband’s will, an elective share, or dower. Dower gives a surviving wife an undivided life estate in one-third of all real property owned by the husband at death or conveyed by the husband during his lifetime without the wife’s joinder. This right is usually only elected if the estate is insolvent (because dower takes precedence over creditor’s claims) or if the husband made substantial transfers during his lifetime.
As a general rule: A male who conveys real property must state whether he is single or married. If married, the wife must join in the conveyance or separately convey her dower rights in order for the grantee to take the property without it being burdened by her dower rights.
What is a right of survivorship?
The right of survivorship determines what happens to a certain type of co-owned property after one of its owners dies. The right of survivorship is found in a joint tenancy and tenancy by the entirety. Thus, when one property owner dies, that persons share in the property automatically passes to the surviving joint tenants.
What is severance?
Under certain circumstances, the right of survivorship in a joint tenancy is severed (terminated) and a tenancy in common results. A conveyance by a joint tenant in their undivided interest destroys the joint tenancy. The transferee then takes as a tenant in common.
What happens if a joint tenant dies?
If a joint tenant dies, his share in the property passes automatically to the surviving joint tenants.
What happens if a co-tenant in common dies?
Property owned by tenants in common has no right of survivorship. So, if one owner dies, that owner’s interest in the property will pass by inheritance to that owner’s devisees or heirs, either by will or intestate succession.
What happens if a spouse dies?
If a spouse dies and the real property is owned as tenants by the entirety or joint tenants with rights of survivorship, the property automatically passes to the surviving spouse. Additionally, if the husband dies then the wife has a dower right which she may exercise.
What is the register of deeds?
The register of deeds is the place in each county where people record documents relating to land transactions. Many types of documents are recorded here including different types of deeds, land contracts, mortgages, liens and lease agreements.
How are documents recorded?
Each county register of deeds may differ in the process and it is best to check with your local county register of deeds office. Typically, documents can be recorded in person or by being sent to the register of deeds with a check paying for filing fees and transfer taxes. The Register of Deeds Office does not keep the original deed or mortgage; instead, the transaction is recorded by stamping a liber, page, and registration number on the document. A copy or image of the document is then made for permanent record.
Why are documents recorded?
After a document is recorded, it becomes a public record, which can be reviewed or copied by any person. This is done to give the world notice that someone has an interest in the property and establishes a chain of title.
What are the requirements to record an instrument?
The recording requirements typically include:
Documents must have all original signatures and the names must be printed, stamped or typed beneath the signatures.
The document be notarized.
Documents must be on 8 ½” x 11″ or 8 ½” x 14″ paper and must have a 2 ½” top margin for the first page, and a minimum ½” margin on the other three sides of all pages.
The document must be on white paper with black ink and have 10 point minimum type size.
The title or type of a document must be identified on the first line of print.
The property tax identification number and the commonly known address of the property should be on the document.
Warranty deeds, deeds which contain a Convenant of Warranty, Land contracts and assignments of Land Contract must be certified for payment of property taxes before recording the instrument.
Court orders cannot be recorded unless they are certified and sealed.
The name and address of the person who drafted the document must appear on documents executed in Michigan.
Death Certificates must be a certified copy with the raised seal. A copy will not be recorded.
What is a recording act?
Recording acts protect all bona-fide purchasers from secret interests previously created and provide a mechanism for earlier grantees to give notice through recording deeds. These acts require a grantee to record his deed to put subsequent purchasers on notice of his interest. Proper recordation gives constructive notice of the first conveyance to everyone, so there can be no subsequent bona-fide purchasers.
What type of recording act does Michigan have?
Michigan is a “Race-Notice” State which means a subsequent bona fide purchaser (someone who pays value and has no notice of the prior interest) has priority over a prior unrecorded interest, only if the subsequent purchaser actually records first. In other words, under MCLA 565.29, a subsequent bona-fide purchaser is protected only if she takes without notice and records before the prior grantee.
For example, Person 1 conveys land to Person 2 on January 1. Person 2 does not record the deed. Person 1 then conveys land to Person 3 on January 15. Person 3 has no notice about the conveyance to Person 2. Person 2 records his deed on January 18 and Person 3 records his deed on January 20. In a dispute of ownership between Person 2 and Person 3, Person 2 will win because Person 2 recorded the deed first.
Does a judge or jury decide a quiet title action?
Typically, a jury trial is not needed in actions quieting title and rarely would a party really gain an advantage by having a jury. Quiet title actions are ‘equitable’ in nature, and as such, typically would be decided by the judge and not a jury. However, it is possible that there may be a right to a jury for those quiet title actions which are similar ejectment. A jury trial is allowed by statute in ejectment actions which has been preserved in the Michigan Constitution.
What is a judgment to quiet title?
If the judge rules in your favor, the judge will issue a judgment quieting title which provides that the plaintiff(s) have legal and good title to the property.
Pursuant to MCL 600.2935, the judgment quieting title may be recorded at the county recorder’s office. Often the judgment will include language stating that the plaintiff may use the judgment with the effect of a deed for any purpose necessary to transfer, sell, convey, or occupy the property.
I have a judgment to quiet title but there are people living on the property, can I kick them out?
No. A judgment to quiet title established clear title in your name; but, does not give you the right to possess the property. If there are people living on the property which you have title to, you must follow the Michigan Summary Proceedings (eviction proceedings) which can be found at MCL 600.5714.
Why do tax reverted properties need to have a quiet title action done?
If you plan on selling or financing the property then title insurance is required for the property acquired at a tax deed sale. A title insurance company or financing company will not lend money or issue title insurance on the basis of an “unquieted” tax deed title because it is possible that the title may be unmarketable. Thus, a “Quiet Title” action is almost always required if the property was acquired by a tax deed. This process is extremely important when title insurance is required for financing and when the specific provisions contained in MCL 211.79a regarding abandoned property purchased at a tax foreclosure are involved.
What court is a quiet title action filed in?
The Circuit Court in the county the property is located.
Who is a quiet title action filed against?
A quiet title action is filed against defendant(s), other persons or entities besides the person filing suit that either have, or appear to have, an interest in the property in some manner. All persons and corporations having any adverse claim must be joined to the lawsuit. Failure to join all persons with adverse interests will require a second quiet title action.
What is adverse possession?
Adverse possession can be grounds for a cause of action to quiet title or for a declarative judgment that title has passed in property which you have possessed after meeting all the requirements under Michigan law. In order to establish title by adverse possession, the possessor must show: an actual entry giving exclusive possession that is open, visible, and notorious, hostile and under a claim of right, and continuous and uninterrupted for 15 years.
Once you have met the adverse possession requirements, you may bring an action to quiet title, granting you clear title to the land.
What is a partition action?
A partition action is brought to divide property when property is owned jointly. If a person does not want to divide their interest then a partition action can be brought and a judge can order a partition of the property. The division of land or of proceeds depends on the nature of the tenancy that the parties had when they owned the property. If you own property as joint tenants, then the property will be divided in equal shares. If you own property as tenants in common, then the property can be divided according to your contributions to its acquisition.
What are claims of acquiescence?
Claims of Acquiesence are similar to adverse possession; but, is a doctrine courts use in boundary line disputes. Claims of acquiescence occur when either:
(1) a dispute existed at one time over the true boundary line and there was a settlement of the dispute, which the respective parties agreed to, carried out, and performed; or
(2) the boundary line was treated as true line, whether mistakenly or not, for at least 15 years.
In the first case, the boundary line in dispute does not need to be acquiesced to for 15 years, but a suit must be filed within 15 years after the acquiescence ends.
In the second scenario, after 15 years title is vested in the claimant and the original owner is precluded from asserting the rights he or she may have had in the past over the boundary line.
Who is the plaintiff in a quiet title action?
A person who has an interest in real property and wants to establish clear and superior title to the property.
Who are the defendants in a quiet title action?
Any person or entity with an interest, or alleged interest, in the property that is adverse to plaintiff’s interest, whether such alleged interest is recorded or not. It it important to note that under MCR 3.411(H), a quiet title action will only bind those persons who are parties to the action.
How long is a quiet title action?
It can vary, and no set time can be given, but typically an action can last anywhere from 60 to 90 days depending upon on the number of individuals who may have potential claims against the property and depending on whether there is a defense tendered. The general procedural layout is as follows:
Plaintiff has 90 days to serve the defendant(s) after filing a complaint. (but service is usually done within less time-approximately 30 days).
Defendant has either 21 or 28 days to answer the complaint depending on the method of service.
If the defendant does not answer, a default will be entered.
Plaintiff can file a motion for entry of default judgment which will usually be heard by the judge within 2 weeks of filing.
A default judgment will then be entered on that day.
Defendant then has 21 days to appeal the default judgment.
If a defendant appears and disputes the action, no time can be set for how long the litigation will take place.
Is there a time limit for when I can bring a quiet title action?
There is a 15 year limitation period for actions involving real property, including a quiet title action. (See MCL 600.5801(4)). In other words, failure to sue within the 15 year period could bar the plaintiff’s action and result in a dismissal.
Can I sue for money damages as well as title to the property?
Yes. In certain circumstances you can also sue for compensation; however, MCR3.411(E) limits the time frame for damages to the 6 years prior to the commencement of the action.
What is the difference between a tax title certification and a quiet title action?
A quiet title action is an action seeking to resolve disputed interests in real property where the plaintiff receives a judgment quieting title in the plaintiff’s name.
A tax title certification is a method of going through a service which certifies a property for title insurance. Tax title services are not insurance companies and do not have any guarantees. A certified title merely confirms to the title agent that all of the necessary state approved tax title underwriting has been performed in order to obtain title insurance.
The important difference between the two is that the Tax Title Service does not clear a title. Tax Title Services only certifies 90% of their services; whereas, a successful Quiet Title action certifies 100%.
Are tax reverted properties risky to buy?
Investing in any new property involves some risk. Purchasing a tax reverted property you will likely need to quiet the title to clear the title free of any other claims and to purchase title insurance. Some risk involves previous liens that are attached to the property and the risk of sometimes not being able to inspect the property prior to purchase. By completing a quiet title action our firm will be able to recognize that all ownership interests and money matters are wiped out and you will have clear title to the property.
Do I need to get a quiet title action in order to obtain title insurance for my tax deed property?
Yes, most title companies will not insure properties obtained through tax foreclosure without all other interests in the property being extinguished.
What are the jurisdiction requirements for a quiet title action?
The jurisdictional requirements for a quiet title action require the complaint to be filed in Circuit Court in the County in which the property is located.
What is the venue requirement for a quiet title action?
MCL 600.1605 provides proper venue is in the County in which the property is located.
What happens if a person dies and they own a property?
When a person dies owning property in their name the disposition of the property will depend on their status as an owner at their death. If real property is owned as tenants by the entirety or joint tenants with rights of survivorship, the property automatically passes to the other joint or co-tenants.
If the person owning property is a husband then the property will be subject to his wife’s dower right. Property owned by tenants in common has no right of survivorship. So, if one owner dies, that owner’s interest in the property will pass by inheritance to that owner’s devisees or heirs, either by will or intestate succession.
Can you quiet title to a property in which you have no claim of interest? (example-vacant house)
No. In a quiet title action the plaintiff must prove it has title to the property which is superior to the title claims of all other persons with an interest in the property. So, before you can bring a quiet title action you must be able to prove you have some interest in the property.
What does it mean to be in forfeiture? Does that mean I lose the property?
No. Forfeiture is not foreclosure. If your property is in forfeiture, this means you have not been paying your taxes and you still have a year before it will be foreclosed. However, the interest and fees will be higher. When a property is forfeited, the interest rate changes from 1% per month to 1.5% per month, retroactive to the date the taxes became delinquent and a $175 fee is added on March 1.
What happens after my property is in forfeiture?
Forfeited taxes are still payable until the following March. However, interest and penalty fees will continue to accrue each month it remains unpaid. If you do not pay the back taxes, including interest and fees, after two years then the property may be foreclosed and the property can be sold at a public auction.
Will I receive any notification before my property is foreclosed?
Yes. Notice is sent by 1st Class Mail on June 1st after the tax has not been paid. An additional notice is sent on September 1st. A notice sent by certified mail is then sent on February 1st. The county treasurer may also insert one or more notices in the county newspaper or an adjoining county newspaper.
For example, the Wayne County Treasurer and Macomb County Treasurer sends at least 10 notices. This is well beyond the statutory requirement. There are 4 first class notices, 3 certified, at least 1 personal visit, and 2 occupant first class mailings.
What happens after my property goes through foreclosure? How do I get it back?
Foreclosure is final. You cannot get your property back after it has been foreclosed. Once the Circuit Court enters the judgment of foreclosure, you only have redemption rights to pay off all past due taxes, costs, and fees until March 31, and the property will be sold at public auction.
When are property auctions held?
Each County differs in the process and it is best to check with your local county treasurer’s office to see what time of the year the sales take place. Typically, each county will have an auction sale twice a year. For example, Wayne County holds auctions September and October of the year the property is foreclosed. Properties are offered for a minimum bid that consists of all delinquent taxes, penalties and interest. Properties not sold at the September auction are then offered in the October auction. Successful bidders will receive a Quit Claim deed to the property.
Can I make partial payments?
Yes, partial payments will be accepted. You can send in whatever amount you wish to be applied to your taxes. In return, you will receive a paid tax statement reflecting the amount paid as well as the balance due amount each time you make a payment. However, interest and costs will still be applied to the amount past due and owing.
What if I simply do not have the ability to pay my taxes?
The worst thing you can do is ignore delinquency notices because your property will then go into forfeiture. Contact your local county’s Treasurer’s Office and there may be a couple of options you can use. For example, in Wayne County you can either call your local Family Independence Agency for assistance: (313) 456-1000, or request a hardship application by calling: (313) 224-6105.
How do I obtain a list of properties with delinquent taxes in a particular community or for the entire County?
Foreclosed homes that may be available for auction are listed on each county’s treasurer website and often sorted by municipality. For example, you can view listed properties in Wayne County on their main website at: www.waynecounty.com/treasurer.
How can I purchase a home that shows delinquent taxes are owing?
Each county may differ in the process so it is best to check with your local county treasurer’s office to see when public auctions take place and if registration is required. In Wayne County, a listing of public auction dates and the properties available are posted at www.waynecounty.com/treasurer.. These Public Auctions usually take place twice per year.