In New York, having clear title is critical when real property is sold or refinanced. A cloud on the title can cause delay and possibly even cancellation of a transaction. Where serious title issues exist, it may not be possible to get title insurance on the property.
To clear up title on a piece of property once and for all, New York law provides a remedy in the form of a quiet title action. The action is brought in civil court when the plaintiff, who can be anyone claiming an interest in the property, files a complaint and gives notice to any other parties who might have a claim on the property. The other parties must then come forward to defend their claim. Once the court has heard the competing claims, it issues a judgment that is conclusive as to all parties, including any unknown parties who failed to come forward and appear in the case.
In many cases, especially those involving very old title defects, the potentially adverse parties simply fail to appear. The judgment entered by the court effectively bars anyone from raising those claims again and establishes conclusive title in the plaintiff.
Quiet title actions can be useful when property is sold at a judicial sale following foreclosure, when the party who lost the property alleges the sale is improper, or when the party who purchased the property wants to extinguish all possible adverse claims. They can also be used to clear up disputes over old easements, or when a party alleges a piece of real estate was conveyed fraudulently.
Quiet title actions in New York require experienced real estate litigation counsel. Procedural rules, especially those regarding notice to adverse parties, must be carefully followed.
Source: N.Y. RPAPL 1501, 1531, accessed Dec. 28, 2014