There are various reasons a dispute may arise concerning ownership of residential or commercial property. If you own or are about to invest in property that has a cloud on title, it’s crucial to take the necessary measures to protect your rights. Clearing the title is not only vital to ensure you own the property free and clear of any title defects, but it’s also important if you plan to refinance or sell it in the future. A quiet title action is a legal mechanism that can be used by a property owner in California to establish clear title — and provide peace of mind.
Quiet title actions are governed by California Code of Civil Procedure §760.010 – §764.010. These lawsuits are filed to resolve title issues that occur between adverse parties who assert claims of ownership to the same property. In the action, the owner requests that the court issue a declaratory judgment “quieting title.” Importantly, a quiet title action can remove unknown parties and challenge anything that clouds the property title.
A judgment in a quiet title action is binding on any party named in the lawsuit who has a claim to the property. However, it will not impact the rights of anyone who was not a party to the action if their claim was known by the plaintiff — or should have been reasonably apparent through inspection.
The primary purpose of a quiet title action is to clear a defect in the title. These actions can also be filed to resolve surveying errors or settle issues concerning fraudulent conveyance. In addition, when a quiet title action is successful, it can determine the rightful owner of a property and resolve any adverse possession claims.
Other common reasons to file a quiet title action can include the following:
Critically, an owner only has a limited amount of time to pursue a quiet title action, depending on the facts upon which it is based. For instance, there is a strict five-year statute of limitation in place for adverse possession claims. An owner has three years to file a quiet title lawsuit for fraud and mutual mistake claims.
An action to quiet title must be brought in the county in which the subject property is located. These actions are commenced in Superior Court by filing a verified complaint. Additionally, a Notice of Pendency pf Action (Lis Pendens) must be filed and recorded with the county recorder’s office in the appropriate county. Notably, this document provides constructive notice to third parties of the pending legal action — and there are specific formalities that must be complied with when it comes to filing, serving, and recording it.
The complaint in a quiet title action must provide a description of the property, name all defendants (both known and unknown) who claim an interest in it, and the title of the plaintiff concerning which a determination of quiet title is being sought. The applicable statute also requires that the complaint include the adverse claims to the plaintiff’s title, the date as of which the plaintiff seeks a determination, and a prayer for the determination of title against adverse claims.
After being served with the complaint, the defendant in the action will file an Answer. This document will include their claim to title, the facts they are disputing, and information that creates their defense. Once the parties have presented their positions in court and have concluded discovery (the investigation of the claims), the judge will render a determination and issue a legally binding judgment. Significantly, the title company must also receive a copy of the court order and related documentation for the purposes of issuing the title policy.
The law presumes that the owner of the legal title to the property is presumed to be the owner of the full beneficial title. However, this presumption can be rebutted. The clear and convincing evidentiary standard is applied in quiet title actions in which a plaintiff seeks to quiet title against a person who holds legal title. In other words, they must be able to clearly, unequivocally, and explicitly show that they are the rightful title holder of the property.
Filing an action to quiet title can be complex and it’s vital to have a skillful attorney by your side to guide you through the process. The attorneys at White & Bright, LLP have extensive experience handling a broad scope of real estate matters — including quiet title lawsuits — and obtaining positive results. Call (760) 747-3200 to schedule a consultation to learn how we can help.