A Midwest family almost lost their home because of a little-known law

Maria Kendall took a break from her job as a cafe manager in 2020 when she decided to do some house hunting on the real estate website Zillow. She looked for a new home in Marshalltown, a city of about 28,000 in Iowa between Des Moines and Cedar Rapids.

It’s where she lived for more than 20 years and where her own children grew up. Maria was ready for a new house with her boyfriend and the three children with special needs she fosters. 

As Maria swiped through real estate, she spotted her mom’s house for sale.

She immediately called her sister Socorro “Coco” Ontiveros in California, who was

with their mom, Natalia Esteban. Maria asked in Spanish when their mom decided to sell the house. 

After a pause, Coco answered. 

“What are you talking about?” Coco said.

Natalia had not decided to sell the house. Yet, there it was, listed for sale on a real estate website.

“And if she wouldn’t have seen it on Zillow, who knows?” says Larry Colton, Maria’s boyfriend.

It turned out someone else took control of Natalia’s house through an unfamiliar property law that’s on the books in Iowa as well as throughout the Midwest — including Nebraska.

It’s called a quiet title action. In most instances, it’s used to settle questions over who owns a piece of property.

People may file quiet title actions to resolve boundary disputes or to resolve who owns property after someone dies. But some worry that problems in the law can result in the exploitation of homeowners, particularly in communities like Marshalltown where many residents are immigrants or don’t speak fluent English.

Experts tell the Midwest Newsroom that shortcomings in the way Iowa’s quiet title law is written include vague language that defines how someone can argue that the property belongs to them. Another is the way people are notified – or, as in Natalia’s case, are not notified – that there’s a dispute involving ownership of their property.

“We would never have found out the house was sold,” Maria says, shaking her head. “My mother would have come back to Iowa in the summer and she would have [found] out she doesn’t have a house.”

Natalia and her then-husband bought the Marshalltown house in 2001. When the couple divorced, Natalia became the sole owner of the house. In 2018, Natalia moved to California but returned to her home in Marshalltown every summer.

Maria raises her voice in disbelief as she recounts how someone could have tried to sell her mother’s house, which had been filled with memories and family photos from their life in Mexico, without anyone knowing.

“It was very frustrating,” Maria said. “Like Larry said, scary thinking that [my mom] was going to lose the only thing that she has left.”

Maria goes on: “My mother is retired, but because she did not work so long in the United States, her retirement is very small. So losing the only thing that can help her to make [a] better quality of life… It was very devastating for her.”

‘Something nefarious’

When someone goes to court for a quiet title petition, they must prove they have an interest in the property. One problem is, the law doesn’t define exactly what a person’s interest has to look like, and real estate experts are worried the law may be exploited.

“It just seems like there is something nefarious going on,” Drake University law professor Natalie Lynner says about the Marshalltown case.

The quiet title law requires a petitioner – the person arguing they have an interest

in the property in question – to notify the most recent owner of the house of what’s happening. 

But if the petitioner says the most recent owner can’t be found, then their next route is publishing a notice of the quiet title in a newspaper of record. 

A person named Catherine Gooding petitioned for Natalia Esteban’s house claiming it was abandoned. In the court documents, she said that the house had been abandoned, she had a tax sale certificate and that she had been in ownership of the house since 2018. That was the interest Gooding showed. (The Esteban family disputed each of these assertions, including that Gooding had only applied for a tax sale certificate, not been granted one. The city did not have any abandonment claims documented.) 

Gooding told the court she could not find Esteban to notify her of the action.

So, as the law requires, she published her notice on three different dates in the Marshalltown Times-Republican: Oct. 7, 14 and 21, 2020. It’s a skinny article with small print addressing Natalia as “you,” and letting her know she has been named as a defendant in the Iowa District court for Marshall County.

Since Natalia wasn’t in Iowa at the time nor does she speak English, she didn’t know to attend the court hearing. Which meant Gooding won the case by default, and therefore, ownership of the house.

Lynner thinks the quiet title law could be enhanced to put a greater burden on petitioners to notify property owners.

“But we wouldn’t just allow quiet title actions to be decided on default without a more robust showing that the parties certainly cannot be found,” Lynner says.

A Midwest Newsroom investigation found that Gooding has acquired more than 40 properties in and around Marshalltown, about a third of them through quiet title petitions. Many of those properties she acquired after a 2018 tornado and the derecho in August 2020.

Phone calls to a listed number for Catherine Gooding went unanswered, although a text message response referred the Midwest Newsroom to Marshalltown City Hall. Gooding’s attorney said neither he nor Gooding wished to comment on this report.

And although Gooding is following the proper legal procedure to file a quiet title petition, city officials are concerned that the diverse population of Marshalltown may be taken advantage of. Residents have a wide range of language skills, education levels and immigration statuses and not all of them read an English-language newspaper, let alone the public notice section. 

Michelle Spohnheimer, the director of Marshalltown housing and community development, says she’s worried about the uptick in quiet title petitions, particularly after 2018 tornados and a derecho damaged a stretch of Marshalltown housing. 

“When you take kind of all those different aspects together, you’ve got a lot of population that has that potential to be in a position where, you know, they just don’t have what they need as resources behind them to know, ‘Oh, this is something that I can fight or I can challenge? Or how to go about getting somebody to help me in the right way,’” she says.

Spohnheimer says at least three other families have reached out to the city recently with claims similar to the Esteban family’s. In those cases, she recommended hiring private attorneys.

Spohnheimer says she believes what’s happening in Marshalltown could be happening in other areas.

She says she and other officials within the housing department try to make sure the diverse populations settling in Marshalltown are educated about homeownership. On top of making sure homeowners understand their rights, Spohnheimer says she has also consulted with the police department by letting them know some signs of suspicious activities, including if people are trespassing on property that isn’t their own.

The Estebans aren’t alone

It’s challenging for Iowa to keep track of how many times house titles have been changed using the same methods as what happened to Natalia Esteban. According to the Iowa Judicial Branch, there is no code in its system that specifically indicates petitions for quiet title. It can only keep track if the clerk’s docketing comments include “quiet title” or a variation of the procedure’s language. Therefore, it is possible there are more quiet title cases in Marshalltown than what the Midwest Newsroom received in a records request.

From 2018 to mid-2021, the Iowa Judicial Branch noted Marshalltown’s county, Marshall, had about 55 quiet title petitions filed. Muscatine County, which has a similar population size, had 28 in the same time period.

With similar quiet title laws in the books in Missouri, Nebraska and Kansas, homeowners from marginalized communities in the Midwest may be at risk of being targeted,[18] according to Mike White, a real estate attorney based in Kansas City. He says that over the course of 50 years, he has encountered multiple quiet title cases. While not involved in the Esteban case, White does say the process can be confusing.

“I’d say the average person knows absolutely nothing about quieting titles or even what the title is,” he says. ”So yeah, they’re at a tremendous disadvantage.”

White adds there’s not much in quiet title laws throughout the Midwest to specifically protect non-English speakers or people who don’t know the system that well. 

All states’ quiet title laws have relatively short descriptions.

White recommends all homebuyers receive legal advice to make sure they can avoid situations like the Estebans.

On her own terms

Maria Kendall and Larry Colton ended up going to court for Natalia Esteban and eventually won the title back. They find themselves fortunate to have been able to hire a lawyer and have the time to win the house back in court. After the previous default judgment was set aside, the Estebans’ attorney filed to dismiss the case.

The Estebans and Gooding eventually reached a settlement and the judge dismissed the case with prejudice – meaning Gooding cannot file the same claim again in court.

When Natalia asked about her Marshalltown home, Maria says she was sad her family heirlooms from Mexico were gone. She asked for pictures of her grandchildren she had framed in the house, but Maria reminded her they didn’t have them anymore.

“I think sentimental stuff is worth more than money. So for her, it was like, she was going more through like, ‘What about the picture of this, this and that?’ Well, nothing you can do mom. Be grateful that you got your house back,” Maria says.

It was hard for Natalia to let go of the house, but she eventually decided to sell the Marshalltown home, this time on her terms and for $50,000. But, Maria noted, the sale from the home will allow her mother to live in financial comfort. At 73 years old, Natalia Esteban decided to permanently stay with family in California.

This story comes from the Midwest Newsroom, an investigative journalism collaboration including IPR, KCUR 89.3, Nebraska Public Media News, St. Louis Public Radio and NPR.