Until 2016, quiet title actions in Maryland had proceeded based on common law and the results were confusing, inconsistent, and unreliable. The Maryland Land Title Association, along with other industry organizations such as the Maryland Bankers Association and the Maryland Association of Realtors, recognized the haphazard process that resulted and successfully lobbied the state to adopt a uniform quiet title process.
The new quiet title rules went into effect in October 2016. Contained in Title 14, Subtitle 6, of the Maryland Real Property Code, they create a more consistent process that, as a result, should render judgments more reliable. This new process is not a replacement of the common law but a formal adoption of a specific procedure. Still, for practical purposes it presents changes of which parties need to be aware.
Changes to Maryland quiet title process
While there are clearly some expected benefits to the new, more streamlined process, the trade-off is that parties must comply with more stringent procedural rules. Some notable changes include:
*Pleadings: Complaints must now be verified by the plaintiffs. The contents of the complaint must also satisfy the new rule – in addition to containing the address of the property at issue, it must include both its legal description and the plaintiff’s claim to title. The defendant’s Answer must also now be verified, and include any claims or defenses.
*Judgments: A significant change is that courts may no longer enter a default judgment to quiet title. Instead, an evidentiary hearing is necessary in order to create a record of the plaintiff’s claim to title. A resulting judgment, however, stands much stronger than the prior default judgments under the former system, and binds both parties and non-parties while being protected against collateral attacks.
Impact of change to quiet title process
Quiet title actions arise in relation to both commercial and residential property for any number of reasons, including when:
- Parties dispute their rights to the property
- A description wrongly identifies party boundaries
- Ancient easements raise questions about rights of entry
Such conflicts may lead to litigation or even prevent a transaction entirely by deterring a title examiner from insuring the title. By clarifying the quiet title process and, in the process, strengthening the effect of a judgment, the law fosters greater confidence in the title by those who would rely upon it.
The changes should ultimately have a positive impact on the real estate industry but with any major change there is also an adjustment period. Parties asserting claims in a quiet title action need to be aware of, and follow, the newly defined requirements in the legislation.
Impact on Lenders’ Rights in Maryland
Quiet title actions can impact the lender’s rights in any number of ways, including threatening the institution’s priority and right to foreclosure. The attorneys of Rosenberg Martin Greenberg are highly skilled at protecting the legal rights of lenders and other claim holders and are prepared to do so in accordance with this updated procedural rule in the state of Maryland. Call today to learn more about our services.
DS News, Maryland Enacts New Quiet Title Action, http://www.dsnews.com/uncategorized/11-22-2016/maryland-enacts-new-quiet-title-legislation