This past week’s Minnesota Home Talk Legal Minute touched on an essential aspect of every real estate transaction; namely, the requirement that the seller convey clear and marketable title to the buyer. You can listen to the segment here.
After a purchase agreement is signed, the seller typically has a set number of days in which to provide to the buyer (at the seller’s expense) a title commitment that shows who presently is the owner of record of the property and whether any liens or encumbrances exist with respect to the property.
What happens when the title insurance commitment reveals a defect? If the defect is not easily curable, the seller may have to undertake a proceeding to clear up the cloud on title. In the abstract recording system, a quiet title action is used to remove adverse claims on title, and for Torrens properties, a proceeding subsequent to initial registration is required. In each of these proceedings, parties with potential interests are given notice and an opportunity to be heard. If no objections are raised to the action, the defect is extinguished from the title.