Legal Question in Real Estate Law in California
Quiet Title and Title Company responsibility
I own 170 acres. There is a
reservation on the deed granting
50% ownership to me and 50 to
third party (deceased) related to
hydrocarbons and restricted to same.
In the process of refinancing the
lender stated concern of
this reservation. The title company
issued a prelim and language was
not an exception. I personally
addressed this confusion with
underwriters and gave them deed
language for review. They gave a
Commitment Letter and language
was not an ''exception''. The very
next day title company who was fully
informed re the lender's concerns,
and aware ''time is of the essence''
for funding, reversed their position
and issued a new commitment letter
making this an exception. Lender's
posture is due to language in deed
and title company confusion they
will only proceed if title is cleared. I
am aware that ''mineral rights'' can
be expunged. In this situation the
heirs refuse to relinguish any rights.
I believe the language in reservation
could never be enfored under law.
What responsibility does title
company have and can I seek quiet
title on this issue?
2 Answers from Attorneys
Re: Quiet Title and Title Company responsibility
I would need to know the details of the grant, the circumstances, and review the deed language. I believe yes you can sue to quiet title. If the issue is the 50%, you may have acquired the property by adverse possession. I did a quiet title action recently, representing the possessor, and brought an action against all persons claiming rights in the property, served summons by publication, and quieted title. If the issue is restrictions on use of the property, there may be ways to address that through a quiet title action also. If anything is improper about the language, as the laws related to how to make future persons bound by a purporter restriction are not simple, that may be sufficient. Otherwise, there are always public policy arguments such as against waste of resources. Email me.
Best,
Daniel Bakondi, Esq.
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Re: Quiet Title and Title Company responsibility
It is very common in California for mineral rights to be excluded (severed) from otherwise absolute fee title. If the property is not in an area known or suspected to have valuable minerals or hydrocarbons, the absence of these rights is of trivial importance.
Whether the absence of the mineral rights should be an exception is another matter, and I express no opinion on this. In a sense, declaring the mineral rights to be severed seems important to a proper description of the property, but also, arguably, the mineral rights are a separate estate just like the (for example) 50 acres that was sold off in 1924 and is no longer part of this parcel.
My hunch is that the lender is using the mineral rights issue as a red herring excuse to get out of a deal they no longer are eager to do for other, undisclosed reasons.