Color of Title

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“The Color-of-Title Act (which goes by the impressive legal designation 43 CFR 540, Subpart 254) describes the right of individuals, groups, or corporations who have “evidence” claiming title to public lands administered by the Bureau of Land Management to file what they call a “color-of-title” claim… even if they have just a piece of paper.”

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Color of Title

When someone occupies a property adversely, they may claim their ownership rights. Color-of-title claims are common in adverse possession cases. Today, in this post (color of title), we will learn the significance behind the hue that is the subject of this article, its legal meaning, and the best way to manage it.


Color of Title: What Does It Mean?

Under the law of adverse possession, a person who occupies property under the color of title can claim it. This means they believe they own it but need proper legal documentation. The theory of adverse possession allows them to perfect their title. They do this by bringing an action to quiet title when they discover that they do not possess a full, valid title.

Their claim would depend on proof that they lived on the land for the necessary period, paid taxes, and improved it, believing they held good titles. The court may decide they have acquired good title through adverse possession under the theory of adverse possession.

It will depend on the nature of the title defect. In many cases, it is possible to repair the title defect using other legal theories.


In Real Estate, What Is The Color Of The Title?

Generally, a title to real property is described by its color of title in property law. Although it is a valid and good title to a parcel of property, it does not provide the parcel with full, legally recognized title. Various reasons, such as adverse possession, may result in a property owner not holding actual title. A deed, for example, may be invalid because of a significant defect in the written document supporting the title.

Consequently, according to the color of title property laws, defective titles need to establish actual ownership of land, called the color of title. It resembles an apparent title because, at first glance, the documents proving the title may be valid. The documents that show the color of the title need to be more legally sufficient to establish the title. They are not legally valid at all.


The deed upon completion of the sale.

If, for instance, a buyer purchases a piece of real estate, they will be entitled to the deed upon completion of the sale. The buyer will then own the parcel in a simple fee, i.e., full ownership. Nevertheless, if there are defects in the deed, such as failure to comply with real estate standards in the area, then the title may not be valid due to the defect.

To illustrate this point, suppose the buyer and other parties were unaware of the error in the title documents. Therefore, the buyer must submit their real estate paperwork to the local registry office or the county recorder of deeds where the property lies, as with most real estate purchases.

Unless all parties inspect the documents further, they may believe the buyer has a valid title. Despite this, the buyer needs to possess the accurate title due to errors in the terms of the written documents that claim to verify the title. In this case, the buyer has a “color of title.” A person who possesses only a “color of title” can’t transfer the title to anyone else.


The Use of Color in Titles?

The owner of the color of title may need more luck; he can use this to his advantage in court.

As required by law, evidence must support a claim of title. The color of the title serves as proof of the buyer’s earnest and good-faith efforts to acquire the property. Thus, attorneys may use this proof to claim the buyer worked diligently and in good faith.


What Is the Importance of Choosing a Title Color?

Although a property appears to have a colorable title, the law still requires you to follow it and resolve claims. The main reason is that a legal and proper title gives the owner rights and responsibilities.

It is not possible to pay taxes on real estate that does not belong to one. Another example would be filing a claim with an insurance company when the property does not legally belong to one.

Obtaining a title insurance policy would require proof of a valid title to prevent theft, loss, or damage. Furthermore, establishing the proper title and ownership would be crucial when selling or transferring the ownership.

This could also lead to a lot of problems for the buyer as well. It could be challenging to sell the property with a color of title issue – and even illegal. The actual owner often deprives a buyer of the land they have paid for, purchased, and built on.


What Are Examples Of Colors Of Titles In Real Estate?

In addition to these examples, here are some more situations in which the color of the title can be an issue:

  • Buyers may think they are obtaining a valid title to a parcel of real property when they purchase it. Still, they may later discover that the previous owner had a defective title to the property. The buyer’s title is now considered inferior as a result of the defect;
  • A situation in which two or more individuals purchase the same piece of real estate and receive separate deeds to it;
  • Deeds executed in a way that makes them invalid or questionable, such as forgeries, non-proper delivery and acceptance, or non-recording.

Buyers with defective deeds only hold the property under the color of title and do not own it in whole or have good title.


What Are Some Legal Issues In The Color Of Title Adverse Possession Case?

In addition to adverse possession, color of title issues often arise when a person acquires a parcel of land. If a person is in adverse possession, they can occupy the land and “possess” it without any right. An adverse possession of color of title occurs when someone has color of title through adverse possession rather than a valid purchase transaction.

Although the person may be able to hold complete control of the property if the adverse possession process is successful, they will not have title to it. Unlike possession, title establishes actual ownership, whereas possession does not. There is no way to acquire government, state, and local government lands through adverse possession.

Therefore, the color of the title issue can arise in either of two everyday situations. A person who claims adverse possession of the land may attempt to sell the property but cannot produce legal title in fee simple. Another possibility is that the legal owner attempts to remove the person who claims adverse possession.


Determines the title and other aspects of property rights.

Adverse possession involves several steps, varying based on the relevant laws in the state where the property resides. The law of the state where the property lies determines the title and other aspects of property rights.

Generally, the owner must live on or possess the land to complete the claim process. To complete the process, a person must satisfy the following conditions:

  • According to state laws, people living on the land must live there for 12 to 20 years. Color of the title is essential here since certain states reduce the required period significantly if the person has the color of the title;
  • The person claiming adverse possession must be the only occupant of the property;
  • As soon as the occupier occupies or takes possession, it is necessary to notify the valid owner that ownership has been claimed.
  • Having the color of the title gives an adverse possession individual an advantage; even if they only occupy a portion of a parcel of property, the negative possession individual can eventually gain ownership of the entire parcel if they have the color of the title. The only way to acquire ownership of the portion they occupy if they do not possess the color of title is through adverse possession.
  • It is also necessary for someone in adverse possession to have paid property taxes and improved the property in some way, such as building a wall around it.

Finally, adverse possessors seeking valid titles must file a claim to the quiet title with the civil court in the area where the land lies that handles factual property disputes.


Adverse Possession – What Does It Mean?

A person who claims adverse possession can force a deed to pass to someone with the legal title and actual deed to the property.


Adverse Possession – What Does It Mean?


The neighbor next door could eventually claim ownership rights to the private road owned by the person next door if he continuously uses it to get back to his home. When the original owners haven’t objected or fought the claim, or sometimes even if they do, a neighbor who has been trespassing may acquire property rights.

Generally, adverse possession laws favor trespassers over owners. In most states, harmful possession laws apply and apply differently. If the title holder does not bring suit or does not bring suit at all, the adverse possessor can quietly obtain title to the property that isn’t theirs.


Requirements for Establishing Adverse Possession

It is important to note that adverse possession requirements vary from state to state, but most jurisdictions share standard requirements.

  • It is optional for the landowner to know about adverse possession to claim it. The person seeking adverse possession must actively and publicly occupy the land. The occupation may not be secreted or hidden. The occupation is not required to be known to the landowner.
  • It is the sole possession of the land that the person seeking adverse possession has, and neither the public nor the valid owner can be in possession simultaneously.
  • It’s an occupation where the interests of the owner are negatively affected. The property owner doesn’t have the occupier’s knowledge of his occupation. If the occupier has allowed the tenant to utilize the property in some way. There is no legal right to assert adverse possession if the owner permits the occupier to use the property.
  • It’s a time of occupation that the state enforces for a certain period. Depending on location, the statute’s duration can vary between three and twenty years. Suppose the person with the property is in possession for an uninterrupted time. In this scenario. In that case, they might be able to add their inadequate possession duration to the previous owner’s.
  • It is vital to establish a distinction between continual and continuous occupation. Continuous and uninterrupted occupation could be described as “used for some time.


Some Other Examples of Requirements

The following are examples of two requirements:


Occupation hostile

A neighbor constructs a fence. Ten years later, the wall is two feet over your property line. This may seem harmless. However, the law would consider it hostile. You didn’t give the neighbor permission to use your property.


Continually and without interruption

The possessor can use the property in a manner consistent with its type of property, even though every element of adverse possession must exist throughout possession. Even though no one occupies a summer cottage for nine months, adverse possession may qualify as continuous and uninterrupted if it involves a seasonal property, such as a summer cottage.


Limitations on Actions

The right to bring suit for adverse possession is subject to state or jurisdictional limitations. For instance, adverse possession is not available for government-owned land.

According to California law, to recover land owned by someone else in adverse possession, you must sue within three years of the day you filed your claim. In addition, you will need the title or color of title conveyance documents to prove your claim.

A possessor who cultivates, uses, or enjoys the property while paying appropriate taxes and who claims the property under a legally registered deed (not a forged deed) must bring suit within five years of the cause of action occurring.

The claim limits 160 acres, including improvements. The possessor must present it within ten years. Without a title instrument, they must have cultivated, used, or enjoyed the property.


Color of Title Issues: Bottom Line

First, you should seek legal assistance if you discover a property title defect. Depending on the circumstances, you can resolve your problem in several ways. The quieting of the title might involve negotiation, a financial transaction, or a civil suit.

With an experienced real estate lawyer representing you, you’ll get the best result possible in this complex and technical area of law.

Hedy Ghavidel

HEDY GHAVIDEL Managing Partner  Roseville Office  1-866-471-6981  Bio...

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