Heirs Are Challenging the Title After My Seller Put $280K Into a Tax-Foreclosed Property
I just had a transaction reach the closing stage when title discovered that two heirs of a former owner may still be asserting an interest in the property.
Here is the situation:
The current owner purchased the property through a county tax auction for approximately $40,000. The previous owner had lost the property to the county because of delinquent property taxes, and the county treasurer subsequently conveyed the property to my client by quitclaim deed.
My client believed that purchasing directly through the tax auction and receiving a deed from the county treasurer gave him clear ownership of the property.
After purchasing it, he invested more than $280,000 into a major renovation as a fix-and-flip project. Between the purchase and improvements, he now has over $320,000 invested, and we are attempting to sell the completed property for approximately $525,000.
My client is a newer real estate investor and fix-and-flipper who is originally from Portugal. He is still learning the American real estate, tax-foreclosure, title, and closing processes. He did not fully understand that a county treasurer’s quitclaim deed might still require additional title work before a future buyer could receive marketable and insurable title.
The former owner is now deceased. Her two heirs are apparently the parties attempting to claim an interest in the property. My client had never heard their names and had no reason to believe anyone else could still have ownership rights until the title issue appeared near closing.
I am trying to get the appropriate title and legal professionals involved, but I am still unsure fully how to advise on this whole situation. Does anyone have any suggestions