How To Clear Clouded Title
I placed an affadavit when my PSA was signed. However, another buyer from long ago also placed a cloud on title after mine.
The supposed earlier buyer did not close, and was not heard from for more than 3mos after he was supposed to close. No extensions were signed.
If I close how long to remove his cloud?
You need to check with the title co. to see if they'd issue you a clean title policy with that other PSA on record...they might or might not.
The seller's affidavit that the other guy has no interest might persuade the title co. to go around the other PSA.
If they wouldn't, you'd need to file a Suit to Quiet Title & name the other guy (in fact, all persons with any recorded interest in the RE), and that suit might take a year or two to make its way through the court...to say nothing about attorneys fees, court costs, etc.
This is where a good relationship with a title company can go a long way. If you can get a title company to "insure over" his claim they are, in essence, agreeing to defend any lawsuit he might bring for specific performance under his contract.
So the title company is going to be looking at a number of issues, How good is his claim and what are our defenses. If the issues are as clear as you claim this may not be a hard sell, but expect some questions.
Since the other guy filed after you even though his contract was executed prior to yours I assume that he is responding to the infomation that the property is sold to a subsequent buyer. He may respond to the threat of a suit "slandering" title, in essence claiming that he knows his claim is improper and filed solely to mess up the subsequent deal. He is potentially liable for damages under such a suit. Or he may take some small amount of money to go away and release his claim. Doesn't hurt to talk to him or his attny.
Do not close without clearing the matter up or insuring over. He could sue you for specific performance given that you had notice of his contract. You might win but at what cost in time and money?
Attorneys all around are in order.