How to Sell a Property with a Clouded Title in Florida

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As you prepare to sell or purchase real estate, the last thing you want is for the deal to be delayed because of a problem with its legal ownership, known as a “cloud” on the title. A title cloud refers to an issue in the legal chain in ownership of the property. Sometimes this stems from a recent problem, while in other cases the cloud results from errors introduced in the deed several sales ago. Until the cloud is resolved, the seller cannot lawfully transfer ownership to the buyer.

Clouds can result from many issues that affect a property’s ownership or associated rights such as liens, encumbrances, or unresolved disputes between parties. Before selling your property, the seller must clear up the issue with the help of their attorney.

Clouded titles are not uncommon in the South Florida real estate market, but when they pop up they are disappointing to both the buyers and the sellers involved in the deal. Real estate lawyers can quickly and easily resolve some title clouds. But others may prove more complicated, especially if they spring from a deed conveyed decades ago.

The best way to successfully navigate these situations is by hiring an experienced Florida real estate attorney to help remove the cloud.

This blog discusses examples of a clouded title, how to resolve title clouds, and selling a property with a cloud on title in Florida. Continue reading to learn more, then contact the Law Office of Gary M. Landau at (954) 979-6566 to schedule a complimentary consultation.

What is an Example of a Clouded Title?

One example of a clouded title is when a deed lists multiple parties but only one person has signed off on the sale. This especially happens when the parties previously owning the home are now divorced. Even though one of the spouses may have agreed to sell the property, the other person still holds legal rights and must be included in the contract and sale.

A similar situation happens when one of the owners on the deed is now deceased. To rectify the cloud, the family may need to undergo a probate of their estate. After the probate is completed, the heir(s) would then own a share of the property and similarly would need to be involved in the contract and sale.

Other causes of clouded titles include:

  • Improper recording of past sales
  • Incorrect descriptions of boundaries or acreage
  • Unpaid taxes or contractor liens filed against the property
  • Disputes in litigation between parties over ownership rights or other matters related to the land
  • Foreclosure activity
  • Fraudulent activity

Resolving Title Clouds in Florida

Clouds on title are generally discovered after a real estate contract is signed. That’s when a real estate attorney performs a title search, which is a review of the current and past status of the property’s deed. This process identifies title issues that must be addressed before the deal can be closed.

Depending on the nature of the issue causing the cloud, there are then several options for resolving it:

  • Paying owed money to remove liens. If title is clouded due to a lien on the property, you’ll need to negotiate with the entity that placed the lien, whether that’s a local contractor who hasn’t been fully paid for their work or the Internal Revenue Service, and come to a financial resolution. Once that money is paid the lienholder will remove the lien, which clears the title.
  • Getting parties to sign a corrective deed. In some cases, resolving a cloud involves repairing a defective deed. Here, a Florida real estate attorney creates a new deed that corrects errors or omissions in the original deed, which is signed by the current owner. This new legal document “cleans up” the title and removes the clouds. It’s important to have an experienced real estate attorney create the new deed to properly protect your interests.
  • Initiating a quiet title action. Sometimes, resolving the issue involves the property owner filing a civil lawsuit in Circuit Court. The lawsuit asks the court to terminate the rights of someone on the current deed (or on older deeds) so the title is no longer clouded. This legal action, involving an attorney, can be a lengthy process.
  • Filing litigation. If several parties to a deed cannot come to a resolution, they might need to file a lawsuit in court to sort out who is the rightful owner.

Selling a Property with a Clouded Title in Florida

Clearing up the title may take time. If there is an active contract on the property when the cloud is discovered the parties may need to agree to extend the sale date on the contract. Often, deals fall apart when a cloud on title is discovered. In this case, the seller may want to hold off looking for a new buyer until the cloud is lifted.

Anyone who knows or suspects they have a cloud on their title should seek to clear it up well before they plan to sell their home. In the case of a divorce, the divorce attorneys can file a new deed along with the divorce decree, listing the party that now owns the property. Or, if someone on the deed is deceased, initiating probate early on with an experienced probate attorney might make sense.

An experienced Florida real estate attorney can advise you of the most effective ways to proceed when you own or are selling a property with a clouded title.

Dealing with a Clouded Title in Florida? Contact Gary M. Landau: Your Real Estate Attorney Serving Broward and Palm Beach Counties

Understanding whether you have a clouded title is essential if you plan on selling your home or other real estate properties in South Florida. Conducting an extensive title search and taking necessary steps toward resolving issues that are discovered is best done by a seasoned real estate attorney.

With more than 25 years of experience and countless satisfied clients, Gary M. Landau and his team are uniquely positioned to help you with your probate and real estate needs in South Florida. Whether you’re ready to probate a loved one’s estate or to write your own will, or if you are purchasing a home, have inherited a home, or want a closing agent to handle title insurance and all documents for your closing or refinancing, the Law Office of Gary M. Landau is ready to work with you.

Call our office at (954) 979-6566 or complete our online form today to schedule a free consultation. We work with our clients in person, over the phone, or on Zoom.

Copyright © 2023. LAW OFFICE OF GARY M. LANDAU, P.A. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction.

7401 Wiles Road, Suite 204
Coral Springs, FL 33067
(954) 979-6566

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