Legal Practice Tip: Slander of Title – Clouds on Property Owned by Public Officials - Articles

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Posted by: Joseph Kirkland on Sep 7, 2018

What are your rights if a false lien is filed against property you own

On May 21, Gov. Haslam signed into law Public Chapter No. 1042 which immediately created a cause of action providing for remedies for the successful challenge of the validity of a lien against a property. The real property owner that prevails in challenging the validity of a lien or a slander of title proceeding may recover:
  1. The owner's reasonable attorney's fees; 
  2. Reasonable costs incurred by the owner to challenge the validity of the lien; 
  3. Liquidated damages in an amount equal to ten percent (10%) of the fair market value of the property not to exceed one hundred thousand dollars ($100,000); and
  4. Any actual damages incurred by the owner.
The provisions of the act do not apply if the lien is based on a loan agreement which lists the property as collateral to secure repayment of the loan. The statute became effective on signing.
 
What if you are a “public official?"
 
A separate act was signed by the governor on May 1, which took effect on July 1. Public Chapter No. 913 provides a way for “public officials” to administratively challenge the filing with the register a cloud on an interest in real property by way of an affidavit by the official which sets into motion a process to remove the cloud. This procedure is reasonably complicated but may provide the local and state officials with alternative methods for removing the clouds in a more expeditious and less expensive way and may force the hand of individuals filing such false claims.

Joseph "Joe" Kirkland is an attorney and senior escrow officer at the East Memphis office of CloseTrak, Closing & Title Services. Kirkland is active in the Tennessee Land Title Association (chair of the standing Legislative Committee 2017-19, director of the Board of Directors 2018-19) and the immediate past chair of the Tennessee Bar Association's Real Estate Law Section.