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Updated almost 8 years ago on . Most recent reply

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Bruce Bookman
  • Los Gatos, CA
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Quitclaim deed - do I need title insurance?

Bruce Bookman
  • Los Gatos, CA
Posted

I'm a beginner and just reading and watching videos about Tax Liens.  I understand that if the lien is not redeemed (owner does not pay up) in the appropriate time frame the deed goes to the "last in" lienholder.

What seems to be true is that most counties, when they hand over the deed to the lienholder they give you something similar to a quitclaim deed.  And if I understand that correctly, the deed might now be the lienholders, but the TITLE may or may not be clear.

The big question I have is - what is the lienholder to do?  Buy title insurance?  File a quiet title action?  This sounds expensive and a time suck, so I'm not clear on how great it is to get a lien that is not redeemed.  

I'm interested in just getting the interest on the lien and not the property.  So from my perspective it sounds like a whole lot of extra headache is produced if the property owner doesn't pay the lien.

  1. What does a lienholder do once they have a quitclaim or other deed ("judgement deed") to ensure a clear title?
  2. If the lienholder must quiet the title - what kind of cost in time and money is involved?
  3. Should the lienholder, who now has the deed, buy title insurance to take care of getting a clean title?

Please only answer this if you have done lien investments where the lien was not redeemed and  you were given the deed - or you are an absolute expert on this topic.

Thanks in advance for your reply

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