Oklahoma Title

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How Can There Be A Cloud On My Title? It Hasn't Rained In Months!

One of the most frustrating things for buyers and sellers in a real estate transaction is to be told, and this usually comes within days of the scheduled closing, that there is a "cloud" on the title to the property and it will take time and/or money to clear it before the transaction can close. This frustration can be especially vexing to a party of a real estate transaction who does not understand or appreciate what a "cloud" on title is or how it affects him or her as either a buyer or a seller.

While its processes are somewhat archaic and cumbersome, Oklahoma has one of the safest and most secure systems in the country for passing title from seller to buyer in a transaction. One of the reasons for this is the Oklahoma concept of "marketable title." Marketable title is the standard by which title to a piece of real estate is judged to be acceptable for sale from one party to another. In Oklahoma, "marketable title" is considered to be "perfect title" and a title that is free from "litigious uncertainty." This results in matters that would seem to be rather trivial to matters that can delay and, in some instances, cause the cancellation of a transaction. These matters are the aforementioned "clouds" on title.

In order to insure that every title is a perfect title, Oklahoma has established an elaborate set of standards by which the status of title is to be judged. These standards include, but are in no means limited, to the following:

 

1. Both the person in title and his or her spouse must sign every deed or mortgage affecting property, even though the spouse may not have an ownership interest in the property.

2. Only certain officers of a corporation and designated managers of a limited liability company can execute instruments affecting the title to real property.

3. Only the entity that holds record title to a mortgage can release that mortgage. For example, if the records reflect that a mortgage was granted to Company A and a release of that mortgage was signed by Company B and there is no intervening assignment of the mortgage from Company A to Company B, then a release from Company A will be required.

4. Each instrument filed of record affecting title to real estate must be acknowledged by a notary public consistent with a statutorily mandated form.

5. The title to real property owned by a person at the time of his or her death can only be properly transferred through a court proceeding, either a probate proceeding or, in certain situations, a lawsuit known as a quiet title suit.

6. Instruments which are not executed by the actual grantor but by an attorney in fact for the grantor must be supported by a power of attorney that satisfies certain statutory requirements.

7. All property in eastern Oklahoma was originally allotted to one of the members of the Five Civilized Tribes or to a member of the Osage Indian tribe. There is an elaborate set of rules as to how title must have been transferred by each such allottee, depending on the allotee’s quantum of blood (full blood, half blood, etc.) and when the purported transfer was made. These rules must be followed exactly.

 

Failure to comply with these listed matters, plus a myriad of other possibilities, creates a "cloud" on the title. Most of these defects are subject to be cured by the passage of time ranging from five years to thirty years. But if that time has not passed, then some work must be done to resolve the issues.

That work is referred to as "title curative work," and it is the process where time and money gets expended. Some of these items can be cured by tracking down a person or entity and, if they can actually be found, obtaining a new instrument which corrects or replaces the instrument that was deemed to have made the title less than perfect. This process can take some time, but it is a relatively inexpensive procedure. Other matters can only be cured by the filing of a lawsuit. This process usually takes no fewer than sixty days and can cost several thousands of dollars in attorney fees and court costs. The title curative work is undertaken for the sole purpose of assuring that the title being passed is "perfect" title.

Most real estate transactions close without delay and have no need for title curative work. This is because previous transaction steps have been taken to assure that the title being passed is "perfect." But in those relatively few transactions in which title curative work is necessary, it insures that the buyer and all future buyers of the property receive title to real property that has no danger of being attacked or diminished in the future.

While it is frustrating to have your transaction delayed or even cancelled by some mysterious "cloud," this process is for the protection of both buyer and seller. The buyer wants to feel comfortable that the property he is buying is free from the claims of any other party. A buyer in Oklahoma can be more comfortable about the status of his title than in almost any other state in the Union. The Deed a seller gives to a buyer, contains a promise the buyer that no one else has a claim on the property. So the seller wants to be confident that the promise he has made in the deed is true. Otherwise, that seller is liable to the buyer for damages of claims that title is less than "perfect."