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Preventing a quiet-title action before your sale

Selling a piece of real estate, whether large or small, is an important matter for businesses and individuals alike. Perhaps the most important part of the transaction is ensuring that the seller of the property has clear title. In other words, the seller has all the rights of ownership needed to convey the property as advertised.

Questions about ownership often come up when the property is being sold because a title company performs a title search and sometimes requires a survey. If they find a defect in the title, the seller may have to bring a quiet-title action in district court to settle the matter before the sale can take place.

 

 

What are title defects?

Title to property can have several types of defects. A few examples include:

  • Ownership questions. Perhaps a former deed did not contain signatures from all owners, or perhaps a probated estate failed to correctly sell or distribute the property. In those types of cases, a prior owner did not properly convey the property to the next owner.
  • Easements. An easement allows another party to use part of your land for some purpose. They come in many shapes and sizes, and the law generally prefers they be written and to be enforced in a specific way. If your easement does not meet the standards, it can cause a problem for your title.
  • Boundary disputes and adverse possession. Adverse possession is perhaps the most complicated of the issues. Colorado law states that if someone has been using part of your property as their own and meets certain conditions, they may claim a prescriptive easement, or even fee title, to that property after eighteen years.

How to prevent a quiet-title action

Nobody wants to spend their time or money on a court case. Thankfully, there are proactive steps you can take before you put your property on the market to prevent a quiet-title action:

  • Have a title opinion done. A professional title opinion will identify issues for you so you can handle them appropriately.
  • Have a survey done. If you think there may be a boundary issue, a survey is the best way to proceed.
  • Contact your title insurance carrier. These days, many people purchase title insurance when they buy property. If you are one of those people, your insurance policy may cover the title defect you are facing. If so, the title company may be liable for resolving the issue, at its cost.
  • Settle the matter outside of court. If a title defect does show up, review your options for handling the matter outside of the courtroom. Perhaps you need a deed to satisfy an ownership issue. Perhaps you need a new easement agreement that better defines your easement.
  • Boundary line agreement. Colorado law allows property owners to settle their boundary disputes by entering into a special boundary line agreement, which has specific requirements. If you and your neighbor can come to an agreement, you can both save yourselves the hassle of litigation.

Ownership of real estate is not always as simple as it sounds. If you are thinking of selling your property, make sure you have clear title so you don't end up in a quiet-title action mid-way through your sale.

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