Transfer of Title Lawsuit

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 What is Property Conveyance?

Property conveyance is the process of transferring property from one owner to another. This can be done through a sale, gift, or inheritance.

When a person conveys property, they demonstrate an intent to transfer it to someone else. Typically, this is done by transferring the property deed, which serves as a formal act indicating that the conveyance has occurred. The prior owner transfers the property deed or title to the new owner, and the transfer is recorded by the county in which the property is located.

For a conveyance to be valid, the deed must be in writing, signed, and accurately describe the land. While the physical transfer of the deed is not always required for conveyance, some event that shows that the deed holder intended to make the transfer must occur.

After the transfer of the deed, the recipient should record the transfer with the county recorder’s office as soon as possible. This provides evidence of the conveyance and ensures that there are no disputes in the future regarding the property’s ownership.

Can You Dispute a Defective Title?

A land title grants a person legal ownership and property rights; however, land titles are often the subject of legal conflicts and lawsuits.

Some common land title lawsuits include disputes over the land’s boundaries, inheritance disputes, zoning, and land use conflicts, conflicts regarding adverse possession, and issues with defective titles.

Defective titles can delay or prevent transactions such as the sale of a home. A defective title can be defined as a title that is not marketable, meaning that the property sold by a party claiming to have a clean title is actually owned by someone else.

Many factors can render a title invalid and be considered a title defect. These factors include wording issues within the document that are not in compliance with real estate standards for the area, improper recording of ownership, failure to include necessary signatures such as a spouse’s signature, previous liens and other encumbrances that have not been removed, and failure to follow recording or filing procedures when recording real estate documents.

Discovering and addressing title defects is crucial long before the property is sold or transferred. If a defect is detected, the property’s owner will need to remedy it to avoid having the title declared invalid. This is usually done by conducting a title search at the county recorder’s office, which should reveal the property’s true owner.

If a title search does not resolve the question of who truly owns the property, a defective title dispute may be resolved by filing a quiet title action, which is a lawsuit that requests the court to determine the property’s rightful owner.

Can a Title Transfer Lawsuit be Filed for Fraud or Deceit?

Real estate fraud occurs when one party, whether an individual or an agency, provides false information for any real estate transaction or misrepresents information. Examples of this include a seller providing incorrect information about the actual size of an apartment or a real estate agent providing false information about the property’s value.

Many types of real estate fraud include mortgage, foreclosure, value, and title fraud.

Title fraud occurs when the property title is falsely changed or occupied through fraud. An example would be if a person sells a property belonging to someone else by pretending to be the owner. In such cases, the original property owner may not even know that the transaction occurred.

If someone falls victim to title fraud, they can file a lawsuit to recover damages. However, all parties involved in any real estate transaction should work to prevent fraud from happening.

Here are some steps you can take to prevent real estate fraud:

  1. Avoid rushing to finalize any real estate transactions
  2. Conduct a thorough investigation of all real estate agents and brokers involved in the transaction
  3. Obtain an appraisal of the property to determine a fair value based on market prices
  4. Understand the details of the property before proceeding with any real estate transaction.

Are There Defenses to a Defective Title?

Yes, there are defenses that a property owner may use to defend a defective title:

Innocent Purchaser Defense

An innocent purchaser may argue that they did not know about any defects in the title at the time of the purchase. If the purchaser can prove that they acted in good faith and had no reason to suspect any defects, they may be able to defend against claims by others who may have a competing interest in the property.

Statute of Limitations

In some cases, the statute of limitations may have expired, and the party making the claim can no longer bring legal action to contest the title.

Let’s say that Seller A sold a property to Buyer B, but the property had a previous mortgage that was not paid off. The mortgage lender (Bank C) had a lien on the property but did not take action to foreclose or collect the debt owed.

Years later, Bank C discovers the unpaid mortgage and files a lawsuit to foreclose on the property.

In this case, Buyer B may be able to use the defense of statute of limitations. In some jurisdictions, the statute of limitations for mortgage foreclosure may be as little as three years. If Bank C waited too long to file its claim, the statute of limitations may have expired, and Bank C may no longer be able to foreclose on the property.

If Buyer B can prove that the statute of limitations has expired, then Bank C may be unable to bring legal action to foreclose on the property. In this case, Buyer B could keep its title to the property, and Bank C could not enforce its lien on the property.

Waiver or Release

If the person with a claim against the property has waived their rights or released their interest in the property, this can be used as a defense against a defective title claim.

Let’s say that a homeowner (Seller A) sold a property to Buyer B, but Seller A had previously signed a contract to sell the property to Seller C. Seller C did not record their contract with the county recorder’s office, and Buyer B was not aware of the prior contract. After the sale, Seller C discovered that the property had been sold to Buyer B and filed a lawsuit to claim the property.

In this case, Buyer B may be able to use the defense of waiver or release if Seller C had previously waived their rights or released their interest in the property. For example, if Seller C signed a release or settlement agreement with Seller A that released any claims they had to the property, this could be used as a defense against Seller C’s claim.

If Buyer B can prove that Seller C signed a waiver or release that released their interest in the property, then Seller C may be prevented from bringing a claim against the property, and Buyer B could keep their title to the property.

Equitable Estoppel

Equitable estoppel occurs when one party reasonably relies on the actions or statements of another party and, as a result, changes their position or incurs damages. If a property owner can prove that someone else’s actions caused them to rely on a defective title, they may be able to use equitable estoppel as a defense.

Do I Need an Attorney for Transfer of Title Lawsuits?

Transferring a title can be difficult, and title disputes could result in a lawsuit. If you are involved in a title transfer or a lawsuit, consult a skilled and knowledgeable real estate attorney.

An attorney can guide you through the process, help you understand your legal rights and options, and represent you in court as needed.

A real estate attorney can help ensure the title transfer is conducted legally and per all applicable laws and regulations. They can also help identify and address any potential issues or disputes that may arise during the transfer process, such as title defects or claims of ownership.

If a title dispute does occur, a real estate attorney can represent you in court. They can also help negotiate a settlement or resolution to the dispute outside of court, if possible.

Having a skilled and knowledgeable real estate attorney by your side during a title transfer or title transfer lawsuit can help ensure that your interests are protected, and the process is conducted as smoothly as possible.

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