In Texas, ownership of real property is conveyed from seller to buyer in the form of a deed. Deeds establish a chain of title (ownership) for a property that can be verified to ensure marketable title or highlight defects that need to be fixed.
The most common types of deeds in Texas are:
- General Warranty Deeds
- Special Warranty Deeds
- Deeds without Warranty
For a deed to be effective it must contain a grantor and grantee, operative words showing grantor's intention to convey a specific real property interest to grantee, and the grantor's signature with acknowledgement. A deed must be executed and delivered to grantee but does not have to be recorded in the county clerk real property records in order to be effective. Recording is to give notice to the world that the transfer of property has taken place.
General Warranty Deeds
General warranty deeds expressly warrant the chain of title for a property back to sovereign. In short, general warranty deeds warrant the entire title back to before the grantor's ownership of the property. These are preferred deeds for many buyers but are becoming less common in favor of special warranty deeds (discussed below).
Implied warranties include warranties that the grantor owns the property and there are no undisclosed liens or indebtedness against the property.
General warranty deeds are still found in residential real estate transactions not involving investors and other specific transactions.
Special Warranty Deeds
Special warranty deeds are much like general warranty deeds except the grantor only warrants title from the time they acquired title until the sale of the property. The warranty conveyance section of the deed will include wording that limits the warranties as “by, through, or under Grantor, but not otherwise”.
Many investors and businesses will only convey property with a special warranty deed. Commercial properties are commonly conveyed via special warranty deeds. In residential real estate, special warranty deeds are becoming the standard and are preferred by sellers.
Deed without Warranty
A deed without warranty is exactly as it reads and conveys title only without any express or implied warranties. Deeds without warranty are not the same as quitclaim deeds. These deeds are not common but can be used for specific situations such as when the grantor is unsure of their exact title interest in a property or heirs that inherit property they are unfamiliar with and intend to sell.
Quit claim deeds do not convey a proper title interest. A quit claim deed merely states the grantor is “quitting their claim”, or giving up their interest, to the property. There is no conveyance language in quit claim deeds and most title companies will require a proper deed without warranty be executed in place of the quit claim deed.
These deed forms can be customized to fit any situation in which a property transfer is needed. Outside of a sale, deeds can be customized for divorce property divisions, co-ownership, estate planning, foreclosures and “subject to” transactions.
A real estate attorney should be consulted when conveying title interest in any property. Most mortgage companies will require transactions to be closed at a title company to ensure title is marketable and without issues. For private sales, title reports are a paid service provided by title companies that provide detailed title history for a property that can then be reviewed by a real estate attorney.
DISCLAIMER
The information is not offered as legal advice upon which anyone may rely. Information in this article is provided for public informational and educational purposes only. No attorney-client relationship is created by the offering or reading of this article. This law firm does not represent you until expressly retained by written agreement. It is recommended that you seek legal and professional counsel for your individual circumstances prior to taking any action with legal implications.
