Invest in Your Tax Deed Title: Why Quiet Title Action May Not Be Your Best Route to a High Resale Price

Title issues can be a significant concern for anyone interested in purchasing a tax deed property in Florida. With a four-year statute of limitations not appealing to most investors, many opt to address these issues through a legal process known as a quiet title action instead. Quiet title attorneys offering quick and inexpensive quiet title action suits are often not disclosing the true nature of the process, nor setting realistic expectations for their clients.

While quiet title actions can be a useful tool for resolving title disputes, when not handled properly, they can cause more than their fair share of headaches for investors. Clear to Sell provides tax deed investors an alternative to quiet title actions. However, recently we have seen an uptick in quiet title action suits that were not handled correctly, thus causing the underwriters to require our work to supplement what the client already paid for.

Costly Legal Process

If an attorney claims they charge one “flat fee” to handle a quiet title action, they almost certainly are talking about their attorney’s fees, not the total cost. One of the most prominent downsides of pursuing a quiet title action in Florida is the potential for high costs, supplemental to those “flat” attorney’s fees. Court costs dependent upon the value of the property, guardian ad litem expenses due to deceased parties, and international service requirements are just some of the costs that would not be identifiable until the attorney actually reviews your file. When they take shortcuts in these areas, the insurability and/or marketability of your title is at risk.

Time-Consuming

Quiet title actions are notorious for being time-consuming. The legal process can take several months, if not longer, to resolve, usually averaging 3-6 months for a faster suit. During this time, the property may remain in a state of limbo, preventing the owner from making full use of their investment or obtaining a loan to develop it. This delay can be frustrating for those hoping to put the property to productive use or flip it quickly for a profit.

The Challenges of ‘Noticing’

In some cases, quiet title actions can involve parties who are uncooperative or difficult to locate. This can further prolong the process and increase legal expenses. It usually requires hiring process servers and sometimes even a private investigator to track down missing parties, adding more costs to an already expensive process. One of the biggest problems with quiet title actions, especially those performed as a “budget” or “express” option, is serving interested parties as required in compliance with underwriting guidelines.

Sometimes a prior owner or heir is in another country. If so, certain procedures must be followed to properly serve that party. Some of these steps, like going through the Hague or hiring translators for the legal documents, can take weeks and even months, adding to the duration and cost of the process. When process servers or the attorneys try to take shortcuts, this can cause the underwriter to later refuse to issue title insurance despite the quiet title action’s ‘completion’.

Clear to Sell’s founding actually came in response to underwriters’ raising the issue of improperly completed quiet title action suits, and the growing problem of how that affected tax deed properties coming across the agents’ desks.

Impact on Property Value

Improperly completed quiet title actions can expose the tax deed purchaser, their underwriter, and the subsequent buyer to liability. They risk delays in closing, issues with financing, and the possibility of losing a buyer. Increased time on market due to needing to seek other remedies after an improperly conducted quiet title action can force a price drop to attract a new buyer, or a buyer facing a delay could ask for compensation to remain in the transaction for a longer span of time.

In conclusion, while quiet title actions can be a valuable tool for resolving title issues, they are not without their downsides. This can be especially true in the niche tax deed market.  It’s essential to carefully weigh the potential benefits against these drawbacks and consider alternative methods for addressing title issues before pursuing a quiet title action. For tax deed title certification in an average of 30 days or under, with flat rate costs, and the largest title network in Florida, Clear to Sell is here to help!