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?


Asked on 2/07/09, 4:03 pm

2 Answers from Attorneys

Daniel Bakondi The Law Office of Daniel Bakondi

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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Answered on 2/08/09, 10:34 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

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.

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Answered on 2/07/09, 7:58 pm


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