What happens if there is a ‘cloud’ on your residential title?

On Behalf of | Jan 9, 2022 | Firm News |

Selling a home in New Jersey is not always a straightforward, simple process. There may be bumps and legal challenges along the road. One legal challenge that a property owner may have to face is filing a quiet title action.

What is a quiet title action?

A quiet title action is filed by the property owner if a title search reveals a “cloud” on the title, meaning that other parties have a claim of ownership of the property. A quiet title action is essentially a lawsuit where the defendant is anyone and everyone else who has a claim to the property. If the property owner prevails, the other parties that had an ownership interest in the property can no longer challenge the property owner’s claim to the property.

When would one need to file a quiet title action?

There are a variety of circumstances in which a property owner would need to file a quiet title action. For instance, if a mortgage lender still has a lien on the property, this would create a cloud on the title. Another situation in which a title might need to be cleared is if the property has sat vacant for a while and outside parties want to bid on its purchase. A third situation in which a quiet title action may be filed could be when the seller wants to convey the property through a quitclaim deed. In this type of action, the seller gives up their interest in the property but does not promise the buyer that the title is free of other claims. This list is not all-exhaustive; there are many reasons to file a quiet title action.

Quiet title actions are a legal process

Quiet title actions are essentially a lawsuit and must go through certain formalities to be resolved. Many people in New Jersey do not have the knowledge or experience to handle a quiet title action alone. Fortunately, those who want to learn more about quiet title actions and the real estate legal process can seek help so they can make decisions that are in their best interests.