Should I enter into a settlement for real property where the owner on title claims to have gotten on title by fraud?

I filed a claim for adverse possession in California. No defendants have any interest in the property and the person on title & the mortgage co. on record have agreed to enter into a settlement reconveying the deed of trust & transferring the property to me. The mortgage co claims the mortgage has in fact been paid in full; the person on title, however, denies true ownership and believes to have been place on title by an act of fraud/forgery by a third party. The attorney for the owner includes language in the settlement to his effect. The settlement would also contain a general release and a confidentiality clause. Is there cause for concern with respect to me gaining clean title? should i suggest eliminating such language since we are entering into a settlement?

Los Angeles, CA -

Attorney Answers (3)

Michael Raymond Daymude

Michael Raymond Daymude

Real Estate Attorney - Sherman Oaks, CA
Answered

I see several problems with respect to you gaining "clean title." You may have eliminated the defendants you mention but you cannot eliminate the “whole world” through a settlement with only the named defendants.

I assume you have filed suit and recorded the necessary notice of pendency of action. Given the facts you now know, i.e., that the individual on title claims title was procured by fraud -- you may have an obligation to further research the record title to discover additional defendants to name in the quiet title action.

In any event, you will need a default prove-up hearing and will need to prove your claim including that you have paid taxes on the property for 5 years. See my blog post: No Default Judgments in Quiet Title Cases: Period
https://www.mrdaymude.com/no-default-judgments-...

Since you will need to prove your title the confidentiality clause in the settlement agreement may make that difficult as may the assertion that title in the name of the present holder of record was procured by fraud.

I strongly suggest you have an attorney familiar with quiet title actions review the present facts of the case with you. Good luck.

I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for... more
Frank Wei-Hong Chen

Frank Wei-Hong Chen

Real Estate Attorney - San Marino, CA
Answered

Unless you have a reputable title insurance company willing to insure your title based upon this settlement, I would have great concern for you.

Did you file a lawsuit seeking title by adverse possession, and did you serve all possible defendants?

You really ought to have an attorney review the proposed settlement agreement. A confidentiality clause seems quite odd for an adverse possession claim.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is... more
Michael T Millar

Michael T Millar

Real Estate Attorney - Toms River, NJ
Answered

There are several issues raised by your post.

If the record owner is conveying a deed of trust, the language in a confidential settlement agreement may not matter because it is unlikely that the title company will ever see it. However, the issue it raises is whether the person conveying the deed of trust has the ability to convey the property and whether there is someone out there who may have a claim to ownership. If you are aware of the trust, you claim would likely not survive a challenge by the person who was defrauded.

You may be better off letting the adverse possession action proceed to judgment.

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