One common title issue that people come across occurs when the deed to a property bears the name of someone other than the current apparent owner of the property. Title issues under this umbrella can be referred to as “tangled title” or “clouded title”. Tangled title can result from several causes. One of the most common instances is when the owner of a property dies and leaves the property to a relative but the relative does not record a new deed. Often, when someone passes away, their relatives will continue to live in the property without changing the name on the deed resulting in a tangled title. It takes more than a will to prevent a cloud on title. The property must also go through probate and the new owner needs to file a new deed with the city records office.
How Title Becomes Clouded
There are five common ways in which a title can become tangled:
The estate does not go through probate after the owner dies
This is the most common way by which a title gets tangled. When the owner of a property dies, the deed to the property continues to bear the name of the deceased until the heirs put the property through probate. After probate is completed, a new deed bearing the new owners’ name must be recorded with the city records office.
A failed rent-to-own agreement
A rent-to-own agreement is a way of buying property whereby the buyer agrees to make installment payments over a fixed period of time while living in and maintaining the property. The title can become tangled if the deed is not transferred to the buyer after the final payment has been made.
The property is abandoned by the owner
On the rare occasions that property is abandoned by the owner while leaving a tenant to continue living in and maintaining the property, the tenant can open a claim to ownership of the property under Pennsylvania law. The period of abandonment must be at least 10 years. This is known as Adverse Possession.
A sale is not properly recorded:
Property can become tangled if transfer of ownership is not recorded with the city records offices. If for instance, the buyer has paid for the property but the seller suddenly goes off the radar before the deed can be transferred, the title can become tangled.
Stolen deed
Titles can also become tangled when the deed is transferred to a new owner through deception, coercion or even straight up theft. This type of action is referred to as a fraudulent conveyance.
How To Resolve Clouded Title
To resolve a tangled title, the owner can take one of three steps depending on the other people involved and how the title came to be tangled.
If the property owner is deceased and all the heirs can be located, the estate has to go through probate to determine who has legal rights to the property after which a new deed can be filed.
If the property owner is deceased but all the heirs cannot be located or do not show an interest in the property, the petitioner can file a petition in Orphans Court to determine if they have legal rights to the property.
In cases where the tangled property results from failed rent-to-own agreements, stolen deeds, unrecorded transaction or abandoned property, the petitioner can file a Quiet Title action in Common Pleas Court to determine who has legal claims over the property