Morrow v. Shotwell , S. Having said that, no investor should be satisfied unless the legal description is precisely correct and corresponds to previous descriptions in the chain of title. In some cases lengthy metes and bounds are used to describe the property rather than the usual "lot and block" descriptions commonly found in residential subdivisions.
If such a description is outdated, or if there is any doubt as to its present accuracy e. If the deed for some reason refers to more than one description of the property, and there is a conflict, then the more specific metes-and-bounds description controls. Stribling v.
Special Warranty Deed
It is not required that the street address of the property be included in the deed, but it is certainly the better practice to include it. As a practical matter, this makes it easier for investors with multiple properties to determine which deed goes with which property. A caveat concerning "legal descriptions" obtained from the appraisal district: these are typically abbreviated and condensed and not the official legal description of the property as shown in the county clerk's real property records. Two different computer systems are involved.
Quitclaim vs. warranty deed: What you need to know
The legal description in a new deed should track the description lot and block or metes and bounds in the prior deed on file with the county clerk-corrected, if necessary-in order to preserve proper chain of title. At common law, a deed was accompanied by six implied covenants: 1 the covenant of seisin the grantor is the owner of the property being sold ; 2 the covenant against encumbrances the land is owned free and clear of liens ; 3 the covenant that the grantor has the right to convey the property without joinder of others; 4 the covenant of quiet enjoyment, which represents an assurance by the grantor that the grantee's title will not be disturbed by third-party claims; 5 the covenant of warranty, obliging the grantor to defend title against challenges by others; and 6 the covenant of further assurances, meaning a promise by the grantor that will take such other and further actions in the future as may be necessary to vest title in the grantee.
The Property Code, without excluding the potential existence of the common-law covenants in any particular case, recites only two, an attenuated version of the covenant of seisin and the covenant against encumbrances:. The common-law covenant of seisin was a representation on the part of the grantor that the grantor was, in fact, the owner of the property. Section 5. It is unclear what advantage this more limited covenant may possess, except perhaps to make it slightly easier for a swindler to flim-flam a gullible grantee.
The law of implied covenants has been established in Texas law for quite some time. Siler , S. And then came Cochran Investments, Inc. Chicago Title Insurance Company , S. In Cochran , the court of appeals reviewed a special warranty deed conveying a duplex and found that it was indeed possible for a deed to imply the traditional covenant of seisin, but that "it [must be] so clearly within the contemplation of the parties that they deemed it unnecessary to express it, and therefore they omitted to do so. A covenant will not be implied simply to make a contract fair, wise, or just. Real estate professionals are eagerly waiting to see if traditional Texas law as exemplified in Childress will be reinstated.
To summarize: even though deeds may legitimately vary in form in Texas, the use of the traditional phrase "grant, sell, and convey" will always include the two statutory covenants contained in Section 5. Accordingly, even in the case of a deed without warranties discussed below a careful drafter will take pains to expressly disclaim these two statutory covenants. An additional item: one occasionally hears about the implied covenant of habitability and the implied covenant of good and workmanlike construction. Both of these covenants exist in Texas, but apply only in the case of newly-built residences.
Centex Homes v. Buecher , 95 S. These should either be expressly mentioned or "none" should be inserted in that space. A note on terminology: "The primary distinction between a reservation and exception is that a reservation must always be in favor and [held back] for the benefit of the grantor; whereas an exception is a mere exclusion from the grant. Lankford , S. In other words, a reservation retains a certain interest in the grantor e. Such language must be clear-an implied exception or reservation is not good enough.
Griswold v. EOG Resources, Inc. Reservations and exceptions affect the total package of rights and interests a buyer is getting, so investors should consult an attorney and place close attention to the wording. Texas is a community property state and it is good practice but not required to state the marital status of the parties in the deed, since not doing so may raise questions later. For instance, a title company involved in a subsequent transaction may want to resolve any potential community property issues by asking that a prior owner in the chain execute a marital status affidavit or take other action to assure that all community property interests are properly tied up and accounted for before title insurance is issued.
So how does one do this for the grantor? Usually, by showing the grantor's name in the deed followed by for example one of the following phrases:. Choices for the grantee would include "an unmarried person" and "as grantee's sole and separate property. There is no requirement that a deed be recorded in the county clerk's real property records in order to be valid-only that it be executed and delivered to the grantee this may be done privately , at which time the transfer is fully effective between the grantor seller and the grantee buyer.
As between a grantor and grantee, deeds are valid even if the signature of the grantor is not acknowledged before a notary. Haile v. Holtzclaw , S. However, a deed must be properly acknowledged and notarized if it is to be recorded in the county clerk's real property records statutory recording requirements are found primarily in Property Code Chapters 12 and Texas is considered a "notice" state, meaning that recording gives notice to the world of the transfer and, of course, establishes priority in the event an unscrupulous seller conveys the property twice.
App-Houston [1st Dist. All of this of course assumes that the deed is properly filed in the records of the county where it is located. Recording makes it easier for title companies to research and insure the chain of title. Title companies insist on recording for this reason. Recording also informs the taxing authorities where ad valorem tax bills should be sent. Executing and delivering a deed without immediately recording it can be a useful, inexpensive estate planning device-sometimes called "the deed in the drawer.
This is an entirely legal technique that has been used for ages.
Note that there is now another option in this area-the transfer on death deed TODD , explained below. One more item relating to timing-the doctrine of "after-acquired title. A good reason for recording a deed is to preserve evidence of the transfer in the event the original document cannot be located. What happens when an unrecorded deed is lost or destroyed?
Production of the original document is excused when it is established that the document has been lost or destroyed. Other evidence of the contents of a writing is admissible if the original has been lost or destroyed. Loss or destruction of the document is established by proof of search for this document and inability to find it. Gause , S. In fact, in Texas, it is customary to recite that the consideration paid is "ten dollars and other valuable consideration.
While recording gives the public notice that a transaction has occurred, and therefore preserves the integrity of the chain of title, it is Texas tradition that it is not the public's business what the purchase price was. Of course, the parties can always choose to show the actual price if they wish. A recordable deed must be signed and acknowledged before a notary by the seller.
The buyer's signature is not usually required, but it may be advisable to include it if the deed contains specific agreements on the part of the buyer. In order for these to be clear and enforceable in contract, they should be set out in the deed and the buyer should also execute the deed before a notary. See below for more detail on this approach. Can title to property be transferred if money is owed to a lender? Title and debt are different and divisible concepts. A "subject to" deed refers to acquiring title to property while expressly providing that the buyer assumes no liability for existing debts and liens.
It is a common device used by investors in order to buy property, fix it, and then flip it for a profit, all without promising to pay the existing debt or taking any liability for it. Grantee does not assume payment of this or any other indebtedness of Grantor. A grantor may be willing to sell only on an "as is" basis. In such a case, "as is" refers to the condition of the property rather than the condition of the title. In other words, an "as is" deed may also be a warranty deed.
The two are not mutually exclusive. Express and implied warranties of title may be and usually are present; however, there are no warranties made in an "as is" deed as to the state or condition of the land or any improvements upon it. Does the presence of an "as is" clause negate any duty on the part of the seller to disclose defects?
The answer will almost always be no. Note that a grantor may wish to sell and convey property by means of a deed without warranties, which is the effective equivalent of an "as is" clause in the context of title. If this is the objective of the parties, a deed without warranties is almost always a better choice than a quitclaim.
Some lawyers take the view that a deed should be a pure conveyance, uncluttered by clauses and agreements that do not bear directly upon the transfer of title or warranties made by the grantor. The result of this approach is often to necessitate the preparation of one or more companion documents designed to contain additional items that have been agreed to between the parties. In other words, two or more documents are required rather than one.
This may have value when the parties' side agreements are confidential not to be reflected in the public record , but otherwise it may be simpler and more direct to include such agreements in a single comprehensive document. Both grantor and grantee then sign and acknowledge the deed, making it a contract as well as a conveyance.
An example would be the sale of a rental property from one investor to another. In this scenario it would helpful to include certain assignments in the deed-e. Such a clause might look like this:. In connection with the foregoing assignments, and to effectuate same, Grantor gives and grants to Grantee a special power of attorney to receive, endorse, and deposit to its own account any checks, proceeds, disbursements, or refunds which arise from the assignments and relate to the Property. These assignments are made without representation, warranty, or recourse, and are made only to the extent that assignment of the foregoing items is lawful and consistent with existing contractual obligations and commitments of Grantor.
The following are general categories of deed types that are likely to be encountered by a Texas real estate investor:. The term "warranty deed" refers to a deed that contains both express and implied warranties There is also a deed without warranties, discussed below. A general warranty deed is the preferred form of deed for a buyer because it expressly warrants the entire chain of title all the way back to the sovereign, and it binds the grantor to defend against title defects, even if those defects were created prior to the grantor's period of ownership.
Here is a sample general warranty clause: "Grantor binds Grantor and Grantor's heirs, executors, administrators, successors and assigns to warrant and forever defend all and singular the Property to Grantee and Grantee's heirs, executors, administrators, successors, and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, except as to the Reservations from Conveyance and the Exceptions to Conveyance and Warranty.
In a special warranty deed, title is warranted only from the grantor and no further back than that. The grantor's liability for title defects is therefore limited to his period of ownership up to and including conveyance to the grantee. Example: "Grantor binds Grantor and Grantor's heirs, executors, administrators, successors and assigns to warrant and forever defend all and singular the Property to Grantee and Grantee's heirs, executors, administrators, successors, and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, when the claim is by, through, or under Grantor, but not otherwise, except as to the Reservations from Conveyance and the Exceptions to Conveyance and Warranty.
Commercial properties are typically conveyed by special warranty deed. Deeds into an investor's LLC may be either with general or special warranty, depending on the circumstances. There is usually no reason not to use a general warranty deed for this purpose if the property is residential. A deed without warranties is just that-a conveyance of real property without warranties, express or implied, as to any matters whatsoever. If one is the seller, then one cannot be too careful in assuring that all warranties are excluded. This is a sample no-warranties conveyance clause: "Grantor, for the consideration and subject to the Reservations from Conveyance and Exceptions to Conveyance and Warranty, grants, sells, and conveys to Grantee the Property, together with all and singular the rights and appurtenances thereto in any way belonging, to have and to hold it to Grantee and Grantee's heirs, executors, administrators, successors, and assigns forever, without express or implied warranty.
All covenants and warranties that might arise by common law as well as the statutory implied covenants contained in Section 5. Why would anyone make or accept such a conveyance? The usual case is when the parties are unsure as to the extent of the grantor's interest, or if the grantor is willing to enter into the conveyance only on the condition that there is no liability for doing so.
A deed without warranties may transfer the entire interest in a certain property, or it may not. The parties assume the risk of this uncertainty. A deed without warranties is therefore considered a lower form of deed, but it nevertheless is effective in transferring title. As a form of transfer, it is certainly superior to a quitclaim, discussed next. Clients often call a lawyer's office and say they need a quitclaim deed. The lawyer's response should almost always be "No, you don't.
For one reason, a quitclaim is not a true deed at all since it is technically not a conveyance. It merely "quits" any "claim" by Grantor to any right, title, and interest that the grantor may have in a certain property, if any such interest exists. It does not "grant, sell, and convey" as does a deed. Rogers v. Ricane Enterprises , S. Secondly, from a practical standpoint, title companies disdain quitclaims and will frequently require that a proper deed be obtained instead. One does no favor to the chain of title by inserting a quitclaim into it. If the seller is unwilling to provide a conveyance with warranties, then a knowledgeable buyer should insist on a deed without warranties instead of a quitclaim.
A quitclaim contains no covenant of seisin or warranty of title. Jackson v. Assumption deeds are general or special warranty deeds of the usual type. The difference is that assumption deeds expressly provide, as part of the consideration, that the grantee will assume liability for existing indebtedness and promise to discharge one or more existing liens against the property.
The consideration clause in an assumption deed might read as follows:. The Assumed Note is secured by an express vendor's lien and superior title retained in deed of even date recorded at Clerk's File No. As further consideration, Grantee promises to keep and perform all of the covenants and obligations of the Grantor contained in the Assumed Note and the Deed of Trust and to indemnify, defend, and hold Grantor harmless from any loss, attorney's fees, expenses, or claims attributable to a breach or default of any provision of this assumption by Grantee.
Grantee shall commence payments on the Assumed Note on or before the next regular due date under the Assumed Note. Again, separate the concept of title from the concept of debt. They are related but different, and they can be divided, at least when discussing respective obligations of grantor and grantee. One can take title to property without becoming liable to pay the underlying debt. Of course, debts secured by liens against the property remain in place even if title is transferred. Under an assumption deed the grantee declares his assumption obligation to the grantor-but, it should be pointed out, not to the lender, since the grantee has not signed the lender's note.
Similarly, the grantor has not been released from the existing note unless the lender has approved the assumption and expressly released the grantor in writing, which is so rare as to be nearly nonexistent. As a practical matter, expect a release only in response to full payment. An assumption deed may be accompanied by a deed of trust to secure assumption which enables the grantor to step in and make payments if the seller discovers that the buyer has failed to do so.
The seller may then recover these "advancements" from the buyer. This enables the seller to proactively mitigate loss and preserve good credit. If reimbursement for advancements is not made, foreclosure may follow. By submitting this form, you agree to Findlaw. We respect your privacy. Conveyancing, as the name implies, is the act of transferring property to a new owner. The attorney involved in conveyancing is the person who takes the desires of the buyer and seller and translates them into legal reality by drafting and recording appropriate deeds or similar instruments.
To do so, the attorney will determine such issues as what form of document is appropriate for the transaction, who must sign, how the new owners will hold title, exactly what interests in the property will be conveyed, and more.
The Family House in the Divorce
A deed is the document that transfers ownership of real estate. It will identify the buyer grantee and seller grantor , provide a legal description of the property, and be signed by the person transferring the property. The seller's signature must be notarized.
There are two types of deeds commonly used in real estate transactions. The most common form of deed is a warranty deed sometimes called a "grant deed".
What You Need to Know about Deeds and Property Transfer | LegalNature Support
The other common form of deed is the quitclaim deed. Put another way, a warranty deed says "I promise that I own the property I am giving you and the title to it is good," while a quitclaim deed says "I'm giving you whatever interest I have in this property, but I'm not making any promises about it my title might not be good and I might not even own the property but whatever I have is now yours. Where two or more people are purchasing property together, the real estate lawyer must also determine how they will take title, commonly asking whether they wish to hold the property as joint tenants or as tenants in common.
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This decision makes no difference in most of the rights and duties of the co-owners, but makes a great difference on how the land is treated upon the death of a co-owner. Note: the word "tenant" in the terms "joint tenant" or "tenant in common" is an old English law term that in this context merely means "owner.
A joint tenancy involves the right of survivorship. This means that when one joint tenant dies, that owner's share passes automatically to the surviving joint tenants. This happens whether or not the deceased owner had a will; in fact, it happens even if the deceased owner's will attempts to leave his interest in the land to someone else.
The joint tenancy is a popular form of co-ownership between husband and wife, because there is no need for a will or probate of the joint tenancy land, which can save significant time and expense. A small number of states also recognize a "tenancy by the entirety," which is a form of joint tenancy with the right of survivorship that can only be created between husband and wife.