I am thinking of buying a house at 123 Main St. The price was dropped because of a ‘legal issue’ with the description of the property title.
I asked what the issue is and below is the response.
I think the realtor means a ‘quiet title action’ which I looked up and see that it can cost $1200 and take up to 6 months.
I don’t know if I am reading it correctly but wouldn’t 121 have a greater risk of loss if part of that property is included with 123?
I would not be borrowing to purchase this property, I can pay cash.
*The title issue is that for 60 years the deeds legal description references part of 121Main St. A letter of Indemnity is from the lenders title insurer that is issued to your title company insurer that guarantees no loss for costs incurred resulting in any issue arising from a title claim against the property. The issue could be that it only insures up to the purchase price so if you were to improve the property above that price then you would not be covered. A quit title action must be filed and ordered by the court in order to correct the title issue.
The lender has elected to drastically reduce the price of the property in lieu of correcting the title. I cannot indicate on whether there is or is not an easement on the parking spot in rear. The buyer would be responsible for a survey should that be a concern. I am representing the seller who obtained this property through a foreclosure so I have very limited information and am making no representation or claims. *
Sorry I can’t answer your main question, but doesn’t the writer’s final sentence (I make no representations or claims) basically mean you should treat this email as having no content?
I understand generally what that means, but things vary so much between jurisdictions, I’d hate to comment.
Do you have a buyers agent/realtor? In a case like this, you need one. It is there job to explain things like this, and they are professionally trained to do so. If they are good, they will refer you to a lawyer for a quick review of the deed and property right.
I have a buyers agent but I think this is going above his head as well but there is probably somebody in his office who can explain it.
The part that is confusing me is if 121 is in part of 123s deed it seems like 121 would be the one to have a loss.
You would think 121 would be the one to want this fixed.
I’m not sure I understand the part about the lenders title company insurer because if I pay cash there is no lender.
There is a problem with the ownership of this property. Someone else may have a claim to own part of the property. You can get insurance against that eventuality, but it would only cover the purchase price, not any improvements (building, renovation, landscaping). You’ll need a legal procedure to actually correct the problem.
There is second problem too. Someone may have the right to use the parking spot. We’re not really sure, so we can’t tell you if that’s true or not. But finding out if it’s true would be your responsibility. Don’t say we didn’t warn you of a potential problem.
As a result if these flaws, and their resultant gigantic hassles, we’ve decided not to deal with the legal issues and instead dropped the price substantially.
I’m just a total layman but I would think that there can be liability issues for 123. So for example if something happens on what is actually 121 and someone sues, they can name the owner of 123 in the suit since the deed for 123 is claiming that property as part of itself.
I think “quit title action” means “quit title action”. I’ve never seen that phrase before, but there is a similarly-worded action called a “quit claim” in which one party formally abandons any claim (if any) to a property, or piece thereof. It means, essentially, “I make no claim to a certain piece of property, but just in case I do have a claim, I abandon it.”
I could write you a perfectly legitimate quit-claim for the Golden Gate Bridge. Meaning, I hand over to you whatever ownership interest I may have (if any).
Quit claim actions are typically used to repair minor property title discrepancies. For example, if there’s a minor dispute over the placement of a property line, and if the owners make an agreement about where the line should be, the owner who might be giving up a few inches of his property can write a quit-claim, ceding those few inches to the other owner.
I read once of a developer who messed up the property lines in a whole subdivision that his company built. The paved streets, curbs, and sidewalks all encroached a bit on homeowners’ properties on one side of the street and conversely on the other side of the street. They had to end up writing a whole morass or quit-claim deeds, transferring narrow little strips of land, all over the whole subdivision.
So I imagine that a “quit title action” would be some analagous document, where they would get the 121 owner to cede whatever interest he may have in the disputed property over to 123. It would likely be done with an amicable negotiation and payment, if 121 owner is willing.