“Sorry but you don’t own your house.” That is what I had to tell a seller last week who was in a hurry to sell his house so he could by some much needed equipment for his business. He inherited the house from his father. No problem there. But his father had purchased the property with an “Agreement for Deed.” This is a contract between the seller and the buyer where the buyer makes monthly payments but the seller keeps the deed until the contract is paid in full. No problem there. The problem came when the father completed his end of the deal and the sellers gave him a deed-BUT THE DEED WAS NEVER RECORDED! And now no one knows where that deed is that the father received in 1985. So the chain of title was broken. All the future sales were all done on a quit claim deed. A quit claim deed says I give up my claim on this property- it doesn’t mean you have to own it only that you give up any claim to it. I could give you a quit claim deed to Trump Tower. Doesn’t mean I ever owned any of it. It just means I give up my claim to it.
Technically the owners of the house are the sellers heirs. So we tried to find the heirs. Ran skip traces, the same stuff the private detectives use, on the sellers. Could not find either one. It appears the male seller was using an alias and the wife used the same last name. Dead end. If we could have found the heirs we could have gotten them to quit claim their interest in the property to the father of my seller to establish chain of title once again.
So where does that leave my seller. He can quit claim the property to his family members but he cannot give anyone a Warranty Deed. The other option is to do a quiet title action for about $3,000 and 4-6 months. Then he could sell it to anyone he pleases with a special warranty deed.
The moral of the story. First make sure all deeds are recorded. Second get a title company to conduct the sale and process the chain of title the way it needs to be done to protect yourself and your heirs.