Partnerships

Should you joint venture with a title company to resolve unclear liens?

Joint venturing with a title company to resolve complex or unclear liens is not a typical arrangement, as title companies generally operate as neutral third parties. However, understanding their role in clearing title is crucial for any investor dealing with encumbered properties.

October 31, 2026 · 4 min read

What a title company's role truly is

A title company's primary function is to research the property's history to ensure a clear title for transfer. They look for any claims, encumbrances, or defects that could affect ownership.

Their goal is to identify and help resolve issues so that the buyer receives a property free of unexpected legal claims. They are not typically partners in the equity of a deal.

Think of them as the gatekeepers of clear ownership, not active participants in a joint venture. They ensure the transaction can proceed without legal surprises.

When liens become a deal killer

Outstanding liens, such as tax liens, mechanic's liens, or unreleased mortgages, can prevent a property from being sold with clear title. If not addressed, these liens attach to the property, not the owner.

A buyer takes the property subject to existing liens, which he or she would then be responsible for. Most cash buyers, or any buyer, will not accept a property with unresolved liens.

This is where a title company becomes indispensable, as he or she identifies these issues early on. The goal is to clear them before closing, or at closing through a payoff.

This is not legal advice. Consult with a qualified attorney for your specific situation.

Working with a title company to clear title

Once a title search reveals liens, the title company will work to contact the lienholders to obtain payoff amounts or releases. This is part of their standard service.

For complex or old liens where the lienholder is hard to find, they may suggest options like a quiet title action. This is a legal process to establish clear ownership.

Your role as an investor is to provide any information you have to assist them and to be prepared for potential costs. Clearing title is often a prerequisite for closing.

This is not legal advice. Consult with a qualified attorney for your specific situation.

The difference between a title company and a real estate attorney

While a title company identifies title defects, a real estate attorney can provide legal advice and represent your interests in resolving those defects. An attorney can initiate legal action if needed.

For complicated unrecorded liens or disputes, an attorney is often necessary to navigate the legal process. The title company cannot offer legal advice or represent you in court.

You might work with both: the title company provides the report, and your attorney advises you on how to proceed. Sometimes the attorney can work with the title company to clear things up.

This is not legal advice. Consult with a qualified attorney for your specific situation.

Structuring compensation for title work

Title companies charge fees for their services, including title searches, escrow, and title insurance. These are standard closing costs, not part of a joint venture.

If you encounter a deal with significant title issues, you may need to factor in additional legal fees for an attorney to clear them. This would be an expense for your deal, not a partnership split.

When you are dealing with unclear liens, the compensation you are discussing is typically for professional services, not a share of your profits. You pay for the work to clear the title, and then you proceed with your deal.

This is not financial advice. Consult with a qualified professional for your specific situation.

Managing expectations for complex lien resolution

Resolving complicated liens takes time, sometimes weeks or even months, especially if legal action like a quiet title is required. Factor this into your deal timeline.

Be transparent with the seller and your cash buyer about any title issues and the expected timeline for resolution. Delays are frustrating but manageable with clear communication.

Always have a contingency plan if a lien cannot be resolved within your desired timeframe. Sometimes, a deal simply isn't viable if the title issues are too complex or costly to fix.

This is not legal advice. Consult with a qualified attorney for your specific situation.

Questions people ask

Can a title company remove a lien?

A title company can facilitate the removal of a lien by ensuring it is paid off at closing and obtaining the necessary release documents. However, they don't 'remove' it themselves in a legal sense; they process the transaction that leads to its removal.

How long does it take to clear a complicated lien?

The timeline varies greatly depending on the lien type, the responsiveness of the lienholder, and whether legal action is needed. It could take a few weeks for a straightforward payoff, or several months for an abandoned or disputed lien requiring a quiet title action.

What kind of liens are hardest to resolve?

Liens with unknown or defunct lienholders, those tied to complex probate estates, or large IRS liens can be particularly challenging. Also, unrecorded family agreements or adverse possession claims can complicate title beyond standard liens.