Buying or selling a home in Los Angeles is often a dream, but that dream can quickly become a nightmare when a problem with the property’s title arises. A title is the legal document that proves ownership of real estate. When a title has a defect or is subject to competing claims, it is considered “disputed,” and the transaction cannot proceed.
From the hills of Hollywood to the coastal communities of Malibu, title disputes in California can halt a transaction and create significant financial and legal uncertainty for everyone involved.
Common Causes of Title Disputes in California
A title dispute can arise from a wide range of issues, many of which may not be obvious until a title search is performed. These issues are not simply technicalities; they represent significant risks that can derail a transaction and jeopardize your investment.
Some of the most frequent causes we encounter include:
Undisclosed Liens and Encumbrances
Undisclosed liens and encumbrances can happen when a previous owner failed to pay a debt, and the creditor placed a lien on the property. These liens, which can include things like mechanic’s liens, tax liens, or judgments, can prevent a clean transfer of title.
Errors in Public Records
Mistakes happen. A clerical error in a deed, a misspelling of a name, or an incorrect property description in the county recorder’s office can create a cloud on the title.
Boundary and Easement Issues
Disagreements over property lines with a neighbor or a claim to a right-of-way (easement) can cause a dispute. For example, a neighbor may claim a portion of your property as their own through a legal principle known as adverse possession.
Fraudulent Conveyances and Forged Documents
Less common but more serious are cases involving forged deeds or documents, or a past owner who fraudulently transferred the property. These situations require swift legal action.
Unknown Heirs or Inherited Property Issues
When a property is inherited, a will or trust may be contested, or a previously unknown heir may appear with a claim to the property.
The Role of Title Insurance in a Transaction
Before delving into the legal remedies, it is important to understand the role of title insurance. Most real estate transactions in California require a buyer to purchase title insurance. Title insurance is a contract of indemnity, meaning it protects against a loss that arises from a covered title defect. A standard California Land Title Association (CLTA) policy typically covers defects that are discoverable through a review of public records, which includes things like liens, unpaid taxes, or errors in deeds. However, a preliminary title report is not a guarantee of a clear title, and having an experienced eye review the title report and any potential issues is crucial.
Resolving Disputes Through Legal Action
When a dispute is discovered, several legal options may be available depending on the specific facts of the case:
Quiet Title Actions
A quiet title action is a lawsuit filed to resolve a dispute over a property’s ownership. The purpose of this legal action is to “quiet” any competing claims to the property, resulting in a judgment that legally establishes and confirms who holds the valid title.
To initiate a quiet title action, we file a complaint with the Superior Court in the county where the property is located. The complaint identifies all parties who may have a claim to the property, allowing the court to address all potential issues at once.
The court’s judgment, once finalized, is binding on all parties and effectively removes the cloud on the title. A quiet title action can be a powerful tool for clearing ownership issues caused by things like adverse possession, forged documents, or inherited property claims.
Reformation of a Deed
If a dispute arises due to a simple clerical error in a deed, such as a misspelling or an incorrect property description, a quiet title action may be unnecessary. In some cases, we can file a lawsuit to “reform” the deed. A reformation action corrects the document to reflect the original intent of the parties accurately, and t his is typically a more straightforward process than a quiet title action because it focuses on a mistake rather than competing claims of ownership.
Statute of Limitations
One of the most common defenses to a quiet title action is the statute of limitations. In California, there is no single statute of limitations for all quiet title actions. Instead, the court looks at the underlying cause of action. For example, a claim based on fraud has a three-year statute of limitations, while an action based on adverse possession may have five years. However, the clock does not start ticking against a property owner while they remain in possession of the land.
Our Approach to Navigating Title Disputes
At Gomez Law, APC, we pride ourselves on a deep understanding of California real estate law. We approach each case with meticulous attention to detail, beginning with a comprehensive review of all property records, including deeds, lien filings, and title reports. We then work to identify all potential claims and design a strategy tailored to your specific situation.
If you are facing a residential real estate title dispute in Los Angeles or anywhere in Southern California, we are here to help. We invite you to contact us for a consultation. Let us put our experience to work for you.
To discuss your legal needs and learn how we can help resolve your real estate title dispute, please call us at 213-772-6404 to schedule a free consultation with our team.
