Cloud On Title Goes Back Before We Bought The House

Q: We bought a house in 1993 (Oklahoma) and are on the verge of selling it to someone else. The title has a cloud on it which has apparently been there since before we bought the house. I took a look at our original papers and, sure enough, there is the exact wording. It involves getting a quitclaim from three individuals, none of whom are the people we bought the house from. I've been told over and over that we shouldn't have been able to close on the house in 1993 unless this had been cleared up. It is definitely holding up the sale of the house in 2003! I got tired of waiting for the title people to do something, so did some on-line research of my own. I tracked all of the people -- one of them died in 2001. She was the mother of the other two. Neither of these two has any idea why their names are listed on the title in this way. All they could tell me is that, long ago, their grandfather owned the land where that subdivision now sits, but had sold it off piecemeal more than 30 years ago (the time estimate is mine, based on how old the houses are). Who should have made sure the title was clear back in 1993? Are they liable to us if this ends up costing us money? We probably didn't get buyer's title insurance. This was our first house and we were like lambs being led to the slaughter. We were that ignorant. We've already bought another house and have moved, so this isn't holding up any other real estate sales, but paying two house payments is stretching our budget to the point where we're having problems. What can we do? Our buyers have already made improvements to the house that have cost them a lot of money, but can't move into the house. This has to be hurting them, financially. Can they sue us because of the delay? (I know that anybody can sue anybody for anything, but wonder if they'd have a case against us. If they won a judgment, we'd have to file bankruptcy.) I don't know a real estate attorney in our new city, but do have an attorney in the old town who can refer us to someone knowledgeable in that town. It will involve a lot of long-distance calls and traveling, but I'd rather go through the attorney we know and trust. I will be contacting her, but meanwhile, I'm about to go through the roof.

A: Your real estate agent should have told you to get an "owner's title policy". But it's too late now, and if you're not covered by title insurance you are probably out of luck. One option, if you don't need the equity in the old house, is just abandon it. The lender's title insurance will pay him off, and you probably won't owe anything. You'll probably get a black mark on your credit record, though. (Foreclosure). But you can add an explanation which may mitigate the effect of that on any future loan you take out. The usual remedy in a real estate sale is a suit for "specific performance". That means the court orders you to turn over the deed. But in this case you don't have valid title, so there's nothing for you to turn over. The buyers might also be able to obtain damages, and you might have a defense of mutual mistake: both you and the buyer thought you owned the house, and now you've found out you were wrong. It's also possible that you *do* now own the house in question. You say you've lived in it (and presumably paid property taxes on it) since 1993. That's roughly 10 years. I don't know how long Oklahoma law specifies for "adverse possession", but if it's less than 10 years you would be able to go to court and obtain a valid title to the house. I'd suggest you contact _some_ lawyer, somewhere. Whatever rights and obligations you may have, they won't get better from doing nothing about them. Your lawyer can help you figure out the best way to: 1. Deal with the payments on your Oklahome house 2. Deal with any claims the buyers might have against you 3. Possibly acquire valid title through adverse possession. This is for discussion purposes only, and is not legal advice. I'm not a lawyer. If you want legal advice, hire a lawyer. I pledge allegiance to the Constitution of the United States of America, and to the republic which it established, one nation from many peoples, promising liberty and justice for all.

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