While most deeds are documents used to transfer title to property to new owners, they can also be used to accomplish other goals, depending on their precise wording. Of course, the deed is not the actual title document itself.
What follows is a closer look at the types of special provisions included in six types of Texas property deeds. They include the general warranty deed, the special warranty deed, the deed without warranties, the quitclaim deed, the Lady Bird deed, and the deed in lieu of foreclosure.
What is unique about the provisions set forth in a Texas general warranty deed?
This type of deed is viewed as the strongest form of a deed that can be used in Texas. It transfers title to property with both express and implied warranties. An express warranty provides greater protection to grantees and imposes a greater level of liability on the grantor. In contrast, implied warranties are legally understood to be present in nearly all deeds governed by the Texas Property Code whenever the words “convey” or “grant” are used in the document.
Many general warranty deeds use the two words “grant and convey” together when specifically stating what rights are being transferred. These types of deeds are almost always used in Texas residential transactions. Always be sure to have your Houston real estate or business law attorney draft (review or interpret) your deeds for you to be sure all necessary limitations or reservations are included to fully protect your rights. This type of deed provides the lengthiest chain of title.
The special warranty deed in Texas can also be quite useful
Unlike the general warranty deed, this one only offers a warranted title running back to the time
when the current grantor became the title owner. Like the general warranty deed, it sets forth both express and implied warranties.
While this type of deed is commonly used in many commercial transactions, some prospective property owners are rightfully concerned that it will not protect them if they later learn of title irregularities that occurred prior to the current grantor’s legal receipt of title to the property. Legal clients should always ask their lawyers which types of deeds offer them the greatest protection from future legal claims and lawsuits.
A deed without warranties can be as risky as the name implies
This type of deed is often preferred when properties are being purchased by way of a tax sale – or when inheritance properties are known to have definite title issues. To protect themselves in these situations, grantors may be unwilling to provide a stronger form of warranty. This type of deed will usually state in a very direct manner that all the warranties that might normally be considered available under Texas common law – are expressly excluded.
Always be doubly sure to ask your attorney if you should ever accept this type of deed for any tract of land or other property that’s very important to you since various title irregularities may become obvious at a later date and possibly invalidate your full ownership rights.
Should you ever seriously consider using a Texas quitclaim deed?
Since these types of deeds usually do not convey any warranties, it is often too risky to accept conveyance of title to property using a quitclaim deed. In other words, this type of deed does not state in any express or implied manner that the title that the grantor is transferring to you is valid. All this deed does is transfer whatever unknown type of title the grantor has to the new owner. It is always preferable to ask your lawyer to draft a deed for you that uses express wording to state that the grantor is conveying the property in an unconditional manner with warranties.
Another basic problem that can occur with a quitclaim deed is that some title companies are unwilling to insure this type of title. For this reason, you should almost never accept any transfer of title in the form of a Texas quitclaim deed.
The Texas Lady Bird Deed
This deed is also known as a life estate deed that allows a grantor to transfer title of property to a grantee with what is known as an “enhanced life estate” being retained by the grantor. An enhanced life estate allows the holder of it to still sell or mortgage the property without getting the permission of those named as future grantees in the deed. Someone who has only reserved a basic life estate to themselves would have to obtain permission from the various future grantees before trying to sell or mortgage the property.
A deed in lieu of foreclosure
While your lawyer can draft this type of deed for you, they are not used very often when purchase-money mortgages are involved. This is because Texas has “non-judicial” foreclosure proceedings that may be preferable. Be sure to discuss how much equity you hold in the property since you may want to do what is called a “short sale.”
If you are either wanting to transfer title to property in Texas or simply need help interpreting the language in a deed that’s recently been presented to you for your review, please feel free to call one of our Murray Lobb attorneys. We can either draft the right type of deed you need with all the proper legal language — or help you interpret the wording of any deed you have just received.