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    fclaborn's Avatar
    fclaborn Posts: 3, Reputation: 1
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    #1

    Aug 7, 2006, 06:48 PM
    Warranty Deed
    Hi I am new to the forum, but I hope someone has an answer to my questions. My husband and I bought some land in Fairfield , AR. By the way it is beautiful there, we live in California. I bought it on eBay, and you don't have to tell me that was dumb. I realize that now. They are starting to develop that area and someone offered to buy it. We have 2 lots so we decided to sell one.
    Today we heard from the title company (in Arkansas),that a title derived from a tax deed does not result in title which is good and marketable. Apparently the people who bought the property from the State of Arkansas did so through a sale of real property taxes. They then sold it to us. Sun Properties (in Los Angeles), did what I thought was a title search and sent us a warranty deed after it was recorded in Van Buren County. The Arkansas attorney they (title company in AR), referred us to said we could do a quit-claim deed, but we would have to find out who was on the deed before us, or do a "Quite Title" action through him. Can I do the quiet title action myself? We were told there were no liens against the property. We did pay some back taxes which was a small amount. Bottom line a warranty deed is not enough?

    Sorry this was so lengthy I hope someone can advise.
    Thank you, Freida C
    LisaB4657's Avatar
    LisaB4657 Posts: 3,662, Reputation: 534
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    #2

    Aug 7, 2006, 06:58 PM
    I think you need to find yourself another attorney in Arkansas and get a second opinion before you start any quiet title actions. When you bought the property did you purchase a title insurance policy? If so then you should be contacting the company that issued the policy and telling them that some title company in Arkansas says your title is not good and marketable. The title company is obligated to defend the quality of your title.

    If you don't have a title insurance policy then you can go back to the people who sold the property to you and have them take care of filing an action to quiet title. After all, they are the ones who warranted to you that the title was good and marketable (by giving you a warranty deed).

    If I were in your position my first move would be to contact Sun Properties, tell them what you've been told and find out if you have insurance.
    Cvillecpm's Avatar
    Cvillecpm Posts: 553, Reputation: 28
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    #3

    Aug 8, 2006, 04:17 AM
    Don't sell the property now. Someone else in the area will blaze the way for clearing the title since many lots may be in the same situation.

    If you want to sell in a few years, disclose the title situation and have the buyer pay the cost of "clearing" the title.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #4

    Aug 8, 2006, 10:09 AM
    Talk and get an attorney in Ark, you are being told some good and some bad things about tax deeds.

    I buy property at tax sales all the time, you would be surprised at how much property at some point in its history has had a tax sale in its past.

    There are varoius types of deeds, a warranty deed is only one type, and there are about 9 types of warranties deeds with various amounts of warranties in them.

    You have deeds that come about as a reslult of government actions, like a tax sale. As long as it was done properly, that land is very saleable,
    They are merely transferring it to you in some other form of deed, a tax deed merely shows that the government is the legal owner of the property, but does not warranty any of the past liens that may or may not be on the property. So a buyer of the property merely needs to have title search done, and also have title insurance purchased to protect thierself when selling the property. You I believe said they were going to transfer it to you under a quick claim deed, which is the most common deed to transfer property, esp in the South. This deed merely says that they are transferng to you any ownership they have in the land, but will not promise or 'warrant" any one else having a claim to that property or any one else having a lien on that property.

    Now if done by an honest company they will have checked this, and willhave waited for the redemption peroid for the past owner. And no you are not normally required to get anything signed by anyone who was a past owner.

    You may sell the property to someone else with any type of deed you wish, you can issue a warranty deed if you had a good title search done and was sure that there was no one else having ownership of the property, you can sell the property to someone else on a quick claim deed, or depending on how you can sell it under a conditional warranty deed with only some items promised or warrantied.

    The real estate laws form state to state vary greatly, California and some states still use more of a Spanish system ( I was told from my studies) while Ark would use more of an English system of land sales.

    But what has happened, someone bought a large piece of land at a tax sale, they held on to it for the redemtpion period, and now are subdividing it into various others properties and selling them. Since they do not wish to be held accountable for any missing title search info, they are selling on a quck claim deed. This is not illegal or wrong, it is very common.

    I am selling right now some tax sell property to an invester in Alabama who is going to build a business plaza, I bought it on a tax sale, he is buying from me on a quick claim, but after he does all the title searches and the such,
    (owners before me passed away) he would be able to sell the property on varoius forms of deeds depending on the level of risk he wishes to take on the property.

    Out of the last 10 properties I have bought 8 were either on tax liens on on quick claim deeds.
    swtnlnly's Avatar
    swtnlnly Posts: 2, Reputation: 1
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    #5

    Sep 8, 2006, 12:29 PM
    When dealing with tax-deed properties (which most of it listed on Ebay and other auction sites are) It's best to read up on that state's tax-deed info.

    I have dealt with these sorts of properties extensively in Florida and Arkansas. Different States issue different titles with different levels of protection in regards to tax-deeds...

    Here's the scoop... In Florida a tax deed pretty well protects against claims to the property in regards to liens, mortgages, and so-so on previous judgements on owners in the chain of title (Generally but not air tight.) They do NOT protect against federal liens like IRS. For this reason a title insurance company in Florida will not touch (issue a policy) on a tax-deed property until one of two things transpires. 1. Four years has elapsed since being deeded the property. 2. Judgement of quiet title has been decreed in your favor.

    The signifigance of these two items is this... If you are trying to sell the property and the buyer wants to finance with a bank; the bank will not make the loan without title insurance on the property. So if #1 or #2 has not elapsed the only legally safe way to sell it is for cash with a quit-claim. You could draft out your own warranty deed (In Florida there is only one sentence and a title difference between a quit-claim and Warranty) but you would be leaving yourself wide open legally by doing so.

    Now, for Arkansas... Alot of the same Applies the Tax deed issued by the State is a Limited Warranty Deed (Tax-Deed)... They use this because by Arkansas State Law; After that deed is issued (Generally speaking) the previous owner has a statute of limitations of 2 years to bring suit against you to try to get their property back. Affirmative defenses for re-aquisition is that the taxes were actually paid and the State screwed up, they were in the military serving overseas, or were legally mentally incompetent and not in charge of their own affairs at the time the taxes were due... (There are a couple loopholes in this 2 year period in regards to the difference between meets and bounds lands and sub-divided S4 lots.)

    If you are interested in Arkansas Tax lands, do yourself a favor and drop that Ebay Window and pull this up... http://www.cosl.org... That is the Arkansas Commissioner of State lands and that is where the Arkansas Ebay properties come from... And unlike any other state in the union the Negotiated sales list system In Arkansas is TOTALLY setup using the US Mail to Offer to purchase, bid, 30 day grace, then title... All through the mail. I picked up a nice 3 acre corner lot locally here in Arkansas for $400 last month.

    The COSL site also has a wealth of rules and legal info you should know about the stuff.

    Kris
    fclaborn's Avatar
    fclaborn Posts: 3, Reputation: 1
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    #6

    Sep 27, 2006, 11:41 AM
    Kris,
    Thank you sooo much for all the information you gave me! I will go to the web site you suggested, but I wanted to thank you first. I know I'm a little late in getting back to you, but I have not checked/read my e-mails in quite some time. Your explanation was very clear and easy to comprehend, I appreciate that because the simpler the better! Thank you again for you help and the website.

    Freida
    swtnlnly's Avatar
    swtnlnly Posts: 2, Reputation: 1
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    #7

    Sep 27, 2006, 09:29 PM
    Freida,

    No problem at all. Email me if I can be of further assistance... I do not consider myself an expert but I know more than most.

    The Statute of limitations on sub-divided lots is either 60 -or- 90 days if I remember correct before quiet title can be filed on them (faster than meets and bounds lands (Acreage)). In reference to Arkansas. That's the loophole I was referring to. :cool: (this is the good news for you)

    In Arkansas there are many levels of title to a property but only one SUPERIOR title to a property... A limited Warranty transferrs title to the property but does not preclude the possibility of others in the chain of title from coming forward with a claim to it in court... Hence the term "Limited Warranty" This is why Quiet title decree is needed on tax deed properties in Arkansas... Those pesky statutes of limitations I mentioned before.

    In my opinion you should have been told this stuff morally speaking, however legally this is where there is a loophole within itself by using the term, "Buyer is urged to do their due dilligence" on the auction page.

    It's a situation where they don't necessarily have to tell you, and in many cases do not fully understand themselves, operating on nothing more than the premis of late night TV infomercials (Make real estate millions with guess who) and/or the buyer does not know the right questions to ask and those due dilligence statements are generally plastered on all of them so often that it seems commonplace and people tend to see it but not totally understand the underlaying reasons for it.

    You are not the first to fall into this issue and definitely will not be the last.

    Question #1 - Is this a tax deed property? (Yes?)
    Question #2 - Has a quiet title Decree been issued by a court of competent jurisdiction? (Yes?)
    Question #3 - COOL!!! Let's see it.


    In any case the old saying is true and real Estate is a good investment... Buy it because they do not make it any more. Real Estate is Money... Money is Money... and profit is profit... You'll come out okay in the end just got a little more unexpected work to do on that parcel before you can cash in. And you'll know better next time to make the seller do the work first.

    Kris
    ASCJ/BSAE
    fclaborn's Avatar
    fclaborn Posts: 3, Reputation: 1
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    #8

    Oct 5, 2006, 11:33 AM
    Kris,
    I have learned a lot from this and believe me, if there is a next time I will be more careful and do my homework! Thanks

    Freida
    TerriRae's Avatar
    TerriRae Posts: 2, Reputation: 1
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    #9

    Nov 11, 2007, 07:02 PM
    I need to obtain a quiet deed in Arkansas, how do I go about doing it?
    Terri
    chr006's Avatar
    chr006 Posts: 6, Reputation: 1
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    #10

    Jun 19, 2009, 02:29 AM
    Hi,
    I have buy a property in Florida recently on eBay, and I got a general warranty deed.
    Someone knows if these kind of deed covers the buyer from delinquent taxes?
    Who must pay these taxes if there are some on the property?
    Thanks for help me

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