TAX DEED QUIET TITLE ACTIONS GAINING POPULARITY AGAIN

TAX DEED QUIET TITLE ACTIONS GAINING POPULARITY AGAIN

by Michael W. Leonard, Esquire

Boyle, Gentile, Leonard & Crockett, P.A.

www.boylegentilelaw.com

As foreclosure actions have moved their way through the courts, some mortgagors and their respective mortgagees have elected to abandon their homes and collateral in favor of saving the additional expenses relevant to the maintenance of the property and the associated ad valorem taxes.  This has resulted in an ever increasing number of tax deed sales in order to pay counties their much needed revenues.   With the ever increasing number of tax deed sales, many purchasers have elected to enter the fray, not for the purpose of holding on to these acquisitions for the long run, but instead, reselling the acquired property in hopes of making a quicker profit.  The purpose of this article is to address the need for a quiet title suit in the event that property is acquired with an eye on reselling the property in the short run. 

Title based on a tax deed is considered insurable if: (1) the tax deed has been on record for more than 20 years; (2) all subsequent real estate taxes have been paid by the tax deed grantee and his successors; (3) there has been no adverse claim asserted of record, and; (4) there has been no possession adverse to the tax deed grantee or his successors.  See Fund Title Notes, TN 30.01.02(2).  Provided the above requirements can be proven, then title after the expiration of this 20 year period will be deemed insurable. 

Many tax deed purchasers are unwilling to wait the 20 year period in order to have marketable title. In some situations, title underwriters have agreed to insure property acquired via tax deed after 4 years has elapsed since issuance of the tax deed by the Clerk of Court, pursuant to Florida Statute, section 95.191. This statute provides that:            

When the holder of a tax deed goes into actual possession of the real property described in the tax deed, no action to recover possession of the property shall be maintained by a former owner or other adverse claimant unless the action commenced is begun within 4 years after the holder of the tax deed has gone into actual possession. When the real property is adversely possessed by any person, no action shall be brought by the tax deed holder unless the action is begun within 4 years from the date of the deed.

As one can see, section 95.191, Fla. Stat. is a two way street.  This statute limits the prior owner and anyone under the prior owner from claiming possessory rights if the tax deed purchaser has been in actual possession for a period of 4 years.  Likewise, even if a tax deed purchaser acquires title to the property but does not take actual possession, such tax deed holder is prohibited from instituting an action for possession after the expiration of 4 years.  In either event, the party who is relying on this statute must present competent substantial evidence establishing continuous adverse possession as defined by section 95.16(2), Fla. Stat.  This statute provides:

(2) For the purpose of this section, property is deemed possessed in any of the following cases:

(a) When it has been usually cultivated or improved.

(b) When it has been protected by a substantial enclosure. All land protected by the enclosure must be included within the description of the property in the written instrument, judgment, or decree. If only a portion of the land protected by the enclosure is included within the description of the property in the written instrument, judgment, or decree, only that portion is deemed possessed.

(c) When, although not enclosed, it has been used for the supply of fuel or fencing timber for husbandry or for the ordinary use of the occupant.

(d) When a known lot or single farm has been partly improved, the part that has not been cleared or enclosed according to the usual custom of the county is to be considered as occupied for the same length of time as the part improved or cultivated.

To be able to take advantage of the aforementioned statute, and therefore obtain title insurance for a subsequent sale, evidence must be recorded establishing that neither the prior owner nor anyone claiming under the prior owner retained or remained in possession for a year or more after issuance of the tax deed.  Clearly, if one is looking to avoid a quiet title action, and instead rely on the above statutes, it becomes even more important to either remove the prior tenant of the owner or ensure that there is evidence that the prior occupant’s possession is not a continuation of his or her rights under the prior owner’s regime.  One way to secure this evidence is by adding language to a new lease with the former tenant that says occupancy is not a continuation of occupancy under a prior ownership, but is instead an express acknowledgement that the occupancy is being undertaken by, through and under the new tax deed holder. 

It is important to keep in mind that, even after the expiration of the 4 year period, title underwriters may remain skeptical or be otherwise unwilling to provide title insurance absent confirmation that the tax deed sale process was in conformance with Chapter 197 of Florida Statutes.  As a result, many tax deed purchasers have elected to move forward with the filing of a quiet title action following the tax deed sale purchase.  The filing of a quiet title action has the benefit of ensuring that title insurance can be obtained, following a successful quiet title action.  Another added benefit of a quiet title action involves the situation when purchasers are confronted with hold-over owners or tenants who refuse to vacate the subject property.  Fortunately, Florida Statute, section 197.562, allows the successful bidder to obtain possession of the property which is the subject of the quiet title action.  A successful bidder is entitled to apply for a writ of assistance upon 5 days notice directed to the person refusing to deliver possession.  Unlike actions in foreclosure and the safeguards put in place by the Protection Tenants at Foreclosure Act, there are no similar protections afforded to the occupants holding possession after a tax deed sale. 

Unless a purchaser is intending to hold on to property purchased at a tax deed sale for a substantial period of time, the filing of a quiet title action is an excellent way in which to confirm title to the successful bidder and remove unwanted owners and tenants from possession thereof.