Selling a Tax Deed Property in Upstate New York

[Don McAlpine]

Does anyone here have experience clearing a title after a tax sale in upstate New York and subsequently selling the property to a retail buyer?  The property is located north of Albany, NY.

I purchased a property at a tax sale, received a quitclaim deed from the county, and have been marketing it to investors.  I received an offer that is substantially higher than my asking price from a retail buyer, but the buyer would have a mortgage and need a warranty deed.

My attorney reviewed the title search and the county's notifications to lienholders and doesn't see any issues. I asked my attorney about a quiet title action, but he is concerned that the title couldn't be cleared because the previous owner has two full years from the date the county foreclosed to challenge the sale, and it's not possible to quiet the title until the two years have elapsed because they legally have that amount of time, ie. you can't bar their claim while time remains.  The title company says it would need a satisfactory quiet title action and a couple of other factors that would be part of the QTA.

I certainly can't be the first person to attempt to clear a title in New York and would love to get input from someone who has done so.

Thanks in advance...

[John Underwood]

Try and get a Quit Claim deed from the previous owners. Pay them a little for their time.

This will save you the expense and time of a Quiet Title.

[Arthur Schwartz]

i'm interested in following this

[Don McAlpine]

Quote from @John Underwood:

Try and get a Quit Claim deed from the previous owners. Pay them a little for their time.

This will save you the expense and time of a Quiet Title.

 Thanks John.  We discussed this, but weren't sure if that would be acceptable to the title company.  Have you done this?

[Bruce Lynn]

You might check a couple of things. Was the previous owner a LLC? If so is the LLC still in existence? If not maybe they can't challenge the sale?

Is the former owner still alive, any probate, any heirs? If none and you can prove it to title, maybe they will issue before the two years.

[John Underwood]

Quote from @Don McAlpine:

Quote from @John Underwood:

Try and get a Quit Claim deed from the previous owners. Pay them a little for their time.

This will save you the expense and time of a Quiet Title.

 Thanks John.  We discussed this, but weren't sure if that would be acceptable to the title company.  Have you done this?

Yes many times. This removes the cloud from the title if no other liens or mortgages and then you can get title insurance. 

[Don McAlpine]

Quote from @Bruce Lynn:

You might check a couple of things. Was the previous owner a LLC? If so is the LLC still in existence? If not maybe they can't challenge the sale?

Is the former owner still alive, any probate, any heirs? If none and you can prove it to title, maybe they will issue before the two years.

 The previous owner is still alive and was residing in the house.  This is good info, however...thanks for responding.

[Don McAlpine]

Quote from @John Underwood:

Quote from @Don McAlpine:

Quote from @John Underwood:

Try and get a Quit Claim deed from the previous owners. Pay them a little for their time.

This will save you the expense and time of a Quiet Title.

 Thanks John.  We discussed this, but weren't sure if that would be acceptable to the title company.  Have you done this?

Yes many times. This removes the cloud from the title if no other liens or mortgages and then you can get title insurance. 

 Thanks John, I greatly appriciate your input.

[Jack Schwartz]

Hello Don and Arthur,  

I recently had a deal fall through in Sullivan County; NY due to a challenging rule that many buyers are not aware of. Although it was a great deal, my attorney advised against closing without title insurance and a quit claim deed. 

After learning about the 2 options, "quiet title" action or "title certification" through Tax Title Services, 

I realized there are ways to ensure clear title. It may be time-consuming, but if you do your research and confirm there are no challenges, you can proceed confidently. Just make sure to dot your i's and cross your t's to avoid any future issues.

Best, Jacob

[Jack Schwartz]

Quote from @Bruce Lynn:

You might check a couple of things. Was the previous owner an LLC? If so, is the LLC still in existence? If not, maybe they can't challenge the sale?

Is the former owner still alive, any probate, any heirs? If none and you can prove it to title, maybe they will issue before the two years.

Hello Bruce,
Thank you so much for sharing your valuable experience! I completely agree with you - sometimes taking the quickest and simplest route is the best way to go, unless you're up for the long haul of the Quit claim or Title Certification process. Your insight is truly appreciated!

Warm regards, [Your Name]

[Don McAlpine]

Quote from @Jack Schwartz:

Hello Don and Arthur,  

I recently had a deal fall through in Sullivan County; NY due to a challenging rule that many buyers are not aware of. Although it was a great deal, my attorney advised against closing without title insurance and a quit claim deed. 

After learning about the 2 options, "quiet title" action or "title certification" through Tax Title Services, 

I realized there are ways to ensure clear title. It may be time-consuming, but if you do your research and confirm there are no challenges, you can proceed confidently. Just make sure to dot your i's and cross your t's to avoid any future issues.

Best, Jacob

 Thanks Jacob.  I'd be curious to know what the "challenging rule" is that held up your sale?  In my case, the QTA or Tax Title Services wouldn't work and so we're looking for an alternative like John suggested above.

[Jack Schwartz]

"Challenging rule" meaning to say that It's important to be aware of the rules around property ownership, as the original owner may still have a chance to reclaim the property within a specific timeframe. It's crucial for sellers to fully disclose how they acquired the property to avoid any misunderstandings. Each state has different rules, with New York State allowing a 2-year period for the original owner to reclaim their property.

[Lee Macky]

So, if the previous owners have passed and the housecwas vacant 9 yrs. I have a Special warranty deed.  Do I have clear title and am I at risk of anyone making a claim?

[Don McAlpine]

Quote from @Lee Macky:

So, if the previous owners have passed and the housecwas vacant 9 yrs. I have a Special warranty deed.  Do I have clear title and am I at risk of anyone making a claim?

This is best asked of an attorney in the state the property resides, but a Special Warranty Deed only warrants the title for the timeframe the previous owner held title.  This might be adequate for whatever you want to do with the property, but offers less protection than a General Warranty Deed that would offer truly clear title.

Not legal advice...

[Waleska Molina]

Hello @Don McAlpine I was interested to know if you were able to successfully do the quiet title action? I am interested in investing in Tax Deeds in New York as well. Would you mind sharing the name of the attorney you used?

[Landon Mizuguchi]

i'm interested in following this

[Don McAlpine]

Quote from @Waleska Molina:

Hello @Don McAlpine I was interested to know if you were able to successfully do the quiet title action? I am interested in investing in Tax Deeds in New York as well. Would you mind sharing the name of the attorney you used?

 Yes, I ulimately got this done through Tax Title Services.  The thing to remember is New York is an attorney state and my mistake was not asking enough questions of my attorney.  I had incredible diffculty finding a RE attorney to work with, and most are experienced with customary RE transactions.  I would recommend you find an attorney that truly understands the tax sale process and laws surrounding them and can do quiet title work if/when needed.  It would be best to begin your search well in advance of an auction.

I have found an attorney that I will work with the next time.  I can't recommend him as I haven't yet worked with him, but would be happy to share his contact info if you PM me.