BEST PRACTICES TO

AVOID QUIET TITLE

A guide for settlement agents by

INTRODUCTION

AVOIDING QUIET TITLE

When there are non-adversarial title defects, settlement
agents will want to do whatever they can to avoid expensive
quiet title action.

The best way to avoid quiet title is to carefully look for and
resolve any defects prior to closing when you are more likely
to have the full cooperation of the lender, seller, and buyer,
rather than in the future at the next closing or when the
owners are facing foreclosure. Lenders and underwriters
seek out agents who apply best practices consistently and
have written standards of procedures.

This guide provides suggestions for those who own or work

for a title company or real estate law firm to help avoid
the costly and length lawsuit.

01
REMEMBER BEST TITLE
SEARCH PRACTICES

Avoid dangerous practices and implement a standardized

procedure for title examiners and abstractors to mitigate
title defects or claims in the future.

02
BEST TITLE PRACTICES

Avoid the following dangerous practices:

• Hiring inexperienced title examiners who are not covered
by your Errors and Omissions Insurance.

• Failing to set up specific procedures for your employees

or outsourced abstractors to follow with every search.

• Failing to pull documents from the land records. It’s

not always sufficient to search title using indexes. This
puts your company or law firm at the mercy of a county
employee and potential clerical errors.

• Failing to search the chain of title of a property older than

your state’s standard search period.

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BEST TITLE PRACTICES

• Failing to review chain documents and ensure there are no missing

instruments. Be sure to review instruments on the schedule B and
lender documents carefully to find defects in the chain of title before
issuing a policy.

• Failing to review court proceedings that grant title rights for errors.

• Relying on another title examiner’s work, the title report, or one of

your own past searches to issue a policy. Examine the prior policy to
ensure it was backed by a comprehensive search. Title reports may
not have all the most current information. Relying on a title search
that your company previously completed may help save time, but
it also means that new liens or errors in the public record will go
undiscovered before closing.

04
 RECOGNIZE & CURE
POTENTIAL TITLE DEFECTS

Do this before closing. It will ensure the property title is clear

and help avoid title insurance claims or quiet title action.

05
Over 30% of land titles
have defects

That means nearly 1 in 3 closings will

require title curative work.

Source: Cook County, Illinois, Recorder of Deeds (CCRD) 06

CURING TITLE DEFECTS

After the title search is complete and a title report or opinion is created,
you’ll have a clearer idea of what will need to be done to make the property
rights marketable and issue a sound policy. Depending on what state you
work in, here are some common problems and how to avoid them before
issuing a title policy: 07
CURING TITLE DEFECTS

PROBLEM 1:
Invalid Tax Sale. Many state laws and supreme courts require notices of all legal title holders
of record and lienholders, including mortgage companies to be issued. In Florida, Statute
197.522(4) also requires that the owners of nearby lots must be notified of the tax deed sale when
the property described in the tax certificate is either submerged land or common elements
of a subdivision. Failure to follow all the mandatory notice requirements may be considered a
violation of due process and may void the property rights of the buyer or investor.

How to avoid this:

Examine the relevant tax sale notices before issuing title insurance for any property with a
property tax sale in the chain of title.

08
CURING TITLE DEFECTS

PROBLEM 2:
A spouse with bad credit left out of the note or mortgage/documents - if the lender goes to
foreclose then the spouse has a legal right to the title under many state laws.

How to avoid this:

Always ask the sellers and borrowers in the transaction what their marital status is and make
sure they both sign all documents. They will be more apt to sign at initial purchase vs. when
facing foreclosure.

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CURING TITLE DEFECTS

PROBLEM 3:
Municipal Liens go undiscovered before closing. In some states, not all money owed to a
municipality with the right to lien on a property is found in the public record.

How to avoid this:

Research governing authorities with the right to lien on the property and follow their
instructions to request information that is not recorded in the public record. You can learn
how to do a municipal lien search here if you are unfamiliar with this type of property search.

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CURING TITLE DEFECTS

PROBLEM 4:
The legal description has an error, or there have been recent and improvements, creating a
potential boundary issue.

How to avoid this:

Ensure the land survey is updated and confirms that the legal description is accurate and
closes. Be sure to follow your underwriter’s recommendation for an acceptable age of the
survey and write an exception in the policy if an updated survey isn’t furnished by the seller or
buyer before closing.

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CURING TITLE DEFECTS

PROBLEM 5:
A Mechanic’s Lien is filed during the “gap period” or soon after closing.

How to avoid this:

Request a permit history of the property during the inspection period to determine if recent
work was done. Request receipts and have the current owner and/or contractor sign a lien
waiver. Remember to take note of the date Notices of Commencement are recorded and
that they will take lien priority over a mortgage.

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 HAVE A WRITTEN
POST-CLOSING PROCEDURE

Avoid missed or rejected document recordings.

13
“ There's an issue
with about 10% of
post-closing recordings
-- and many of those
issues could result in
title claims.
“
14
Source: The Closing Alliance
POST- CLOSING
PROCEDURES

Just as there should be a standard title

search implemented company-wide, there
should also be as much care taken for
post-closing due diligence. ALTA’s Best
Practice #4 recommends establishing
a procedure after closing regardless of
which party is contractually obligated for
recording documents.

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POST- CLOSING PROCEDURES

Procedures to meet this best practice include:

• Submit or ship documents for recording to the county clerk (or equivalent) or to the
person responsible for recording within 2 business days of the settlement date or
receipt of documents.

• Review the county clerk’s instructions carefully to avoid rejection.

• Track shipments of documents.

• Ensure timely responses to recording rejections.

• Address rejections to prevent any delays.

• Verify that the recordation has occurred by checking the public record with your
state’s required timeframe.

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 AVOID FUTURE
TITLE CURATIVE WORK &
QUIET TITLE
Use Release Tracking with PropLogix if you don’t have
an employee or department with a role dedicated to
post-closing tasks.

17
RELEASE TRACKING

Many title companies and law firms have

post-closing departments that have clearly
documented processes for ensuring the
instruments in the title commitment are recorded
properly. But of course, tracking instruments
to ensure they are recorded isn’t the only
responsibility for post-closers. Smaller companies
without this department may find it difficult to
keep up with all the tasks after closing. And, of
course, many title agents may operate under
the assumption that others in the real estate
transaction are fulfilling their obligations.

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RELEASE TRACKING

Working with a company that tracks releases will:

• Guarantee that all instruments are recorded.

• Provide resolution services for instruments that aren’t recorded according to state statutes.

• Save on time and internal costs when resolving post-closing issues.

• Add peace of mind that all title policies are issued without a cloud.

• Improve audits and relationships with your lenders and underwriters.

• Protect consumers from future issues when they sell their home.

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PROPLOGIX TITLE
CURATIVE & POST-
CLOSING SERVICES

Since settlement agents are compensated in advance for the

post-closing process, regardless of how you decide to do it,
make sure you have written policies that make it a priority.
Doing it right the first time and tracking all instruments in the
title commitment after closing will mean fewer headaches
for you down the road, and it will help build trust with your
underwriters, lenders, and consumers.

To learn more about our

Release Tracking Service

CLICK HERE

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PROPLOGIX TITLE
CURATIVE & POST-
CLOSING SERVICES

Title curative work can be grueling and spread your limited

resources even thinner. The time emailing, calling, and faxing
unresponsive lenders and agents involved in the previous
closing means you have less time to focus on your clients.

Let us solve the toughest

Title Curative cases

SEE HOW TO ORDER !

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C O N TA C T U S

Email: info@proplogix.com
Phone: 941-444-7142
www.proplogix.com