Real property is subject to be transferred in several ways: (l) by purchase, (2) by devise (will), (3) by descent (inheritance), (4) through adverse possession, and (5) by eminent domain. However, the most common form of property transfer is by deed. A deed is a written document transferring or conveying title to or interest in real property from one person or entity to another.
Texas has a statutory minimum standards for deeds but does not have a statutory form.
A deed may be divided into three component parts: the premises, the habendum, and the testimonium. The premises include the date, parties, consideration, granting clause, description, recital, and appurtenances. The habendum et tenendum (to have and to hold clause) includes this clause and the Under and Subject or Mortgage clause. The testimonium clause includes the Warranty and “In Witness Whereof”. This outline is valuable to remember so that a person may check a deed to ascertain that all clauses are included and, also, as an aid in preparing a proper deed.
The extent of the right which a person acquires in property can be no greater than that enjoyed by a predecessor in title.
Any interest in real property, whether present or future, vested or contingent, may be transferred. This includes, but is not limited to fee simple, an easement, an undivided interest, a life estate, timber and mineral interests, a vendee's interest or a lessee's interest. A mere possibility, not coupled with an interest, may not be transferred.
Unless expressly excepted, the transfer of a thing transfers also all its incidents. Thus, a conveyance of land subject to a lease carries the right to collect the rents, and the grantee is subrogated to all rights of the grantor as a lessor.
Deeds most commonly used in Texas are general warranty deeds, special warranty deeds, quitclaim deeds, and deeds without warranty.
Many states have enacted statutes permitting the utilization of simplified or shortened instruments of conveyance. Texas recognizes such documents so long as the minimum requirements of Property Code § 5.022 are followed.
Types of Deeds
Bargain and Sale Deed
A bargain and sale deed is a deed that recites a consideration and conveys all of the grantor's interest in the property to the grantee. This deed usually does not include warranties as to the title of the property conveyed; however, by implication, the grantor asserts that the grantor has possession of, claim to, or interest in the property conveyed.
Cemetery Plot Deed
A cemetery plot deed or certificate conveys a privilege, easement, or license to make interments in the lot purchased, subject to regulations governing the cemetery and to the police power of the state.
A cession deed conveys street rights or other rights of privately owned property to a municipality or county. A cession deed is called a dedication deed.
A correction deed is used to correct a prior erroneous deed. A correction deed is also called a deed of confirmation or a reformation deed.
See Cession Deed above.
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is given by the owner of mortgaged property to the holder of the mortgage when the mortgage is in default and foreclosure is threatened. This deed is given and accepted as an alternative to foreclosure. In Texas, the use of a deed in lieu of foreclosure is simply a deed in satisfaction of debt and merges the debt and the title. It does not cut off subordinate creditors.
Deed of TrustA deed of trust is a form by which real estate is conveyed to a trustee, usually to establish a land trust. Under the terms of a deed of trust, full powers to sell, contract to sell, mortgage, subdivide, and so on are granted to the trustee. The trustee's use of these powers, however, is controlled by the beneficiary under the provisions of the trust agreement. Deeds of trust are used in those states which recognize land trusts.
Deed of Partition
A deed of partition is executed and delivered for the purpose of effecting a judicial or nonjudicial partition of real estate. A conveyance between two or more joint tenants, copartners, or tenants in common, by which they divide the property in severalty, each taking a separate and distinct part of the property according to their ownership interest.
Deed of Owelty
An Owelty deed, authorized under Art. 16, Sec. 50 of the TX. Constitution, is a type of partition deed that allows a cotenant buying the other non-resident owners interest to include the owned, homestead interest in the mortgage.
Deed of Release
A deed of release releases property from the lien or encumbrance of a mortgage or deed of trust on payment or performance of its terms and conditions. In modern practice, a deed of release performs the same function as that of a quitclaim deed. It is also used in connection with judgments or other liens.
Deed of Trust
In Texas, a deed of trust is an instrument used instead of a mortgage. It almost always includes a nonjudicial right of foreclosure for non-payment of the underlying indebtedness.
Fiduciary or Representative Deed
A fiduciary or representative is executed by a person in a fiduciary capacity or as a representative of the estate of the grantor.
General Warranty Deed
A general warranty deed or full covenant and warranty deed is a deed in which the grantor fully warrants good and clear title to the premises.
A gift deed is executed and delivered without monetary consideration. Frequently, the consideration is "love and affection".
A grant deed is a deed where the covenants are created by statute and are contained in the deed merely by using the word "grant". In the typical grant deed, the grantor warrants that the grantor has not previously conveyed the estate being granted to another, that the grantor has not encumbered the property except as noted in the deed, and that the grantor will convey to the grantee any title to the property they may later acquire.
A mineral deed conveys the rights to subsurface land or profits.
A quitclaim deed conveys whatever interest the grantor has in the property, as distinguished from a grant of the fee or other estate with warranty of title. The grantee takes the title "as is". A quitclaim deed is sometimes called a release deed.
In modern usage, a release deed is now synonymous with a quitclaim deed. In some jurisdictions, a release deed is effectuated in connection with the satisfaction or correlation of a mortgage, deed of trust, or any other kind of lien that affects the property.
A sheriff's deed is given by a sheriff after a court-ordered or execution sale of property.
Special Warranty Deed
A special warranty deed contains a covenant of special warranty rather than a covenant of general warranty. Such a covenant of special warranty is a covenant of warranty contained in a deed which is limited or restricted to certain persons or claims. In its most usual form, a warranty is only against claims held by, through, or under the grantor.
A deed used to convey property which specifies that, as consideration, the buyer will support the grantor for the rest of the grantor's life.
A tax deed is an instrument used to convey legal title to property sold by a governmental taxing authority for nonpayment of taxes.
Trust deed or deed of trust are synonymous and are terms used in two senses. In the first usage, it is a document that creates a trust or by which property is transferred to a trust. In the second usage, it is a mortgage used in some states, and in other states, it denominates a security instrument in situations where a debt has been divided up and sold, as in the case of the sale of bonds for which the security is real property.
Essential Elements of a Valid Deed
The essential elements of a valid deed are established by Sec. 5.021 and 5.022, TX Property Code.
The most common essential elements to be found are:
- Use of the proper statutory form of deed.
- Competent parties: grantor and grantee.
- Words of grant or operative words of conveyance.
- Sufficient description of the property to be conveyed.
- Proper execution.
- Delivery and acceptance.
Depending upon the statutes of the particular state where the land is located, the essential elements may also include:
- Address of the grantor.
- Address of the grantee.
- Address of the property.
- Recital of consideration.
- Witnesses (Only required if Grantor signs by a mark - "X").
- Draftsman's name
The date is not an essential element to the validity of a deed, even though good draftsmanship requires the showing of a date.
A number of jurisdictions have adopted presumptions relative to the date of the execution of an undated deed through the utilization of the time of delivery, time of acknowledgment, or time of recording.
However, the common mistake of dating the deed after to the date of the acknowledgment does create a question of validity.
Parties To Deeds
A deed involves the participation of at least two parties: a grantor who must have the capacity to convey and a grantee who must have the capacity to take. All persons who are to execute a deed as grantors should be named as parties-grantors, and all persons who are to take as grantees should be named as parties-grantees.
Parties - Grantors
Identity - The grantor must be the record owner of the interest being conveyed. When a difference in the name of a grantor is due to change in name, death, merger, judicial sale, etc., either the deed must contain an appropriate recital or the records must contain sufficient evidence of that fact. However, in several states, statutory and case law permit a wide range of variance in this respect.
Capacity - The capacity to convey title to real property is always lesser than the capacity to acquire it.
Disabilities - Based on their origins, the different types of statutory disabilities affecting the grantors may be grouped as follows:
- Physical (minority).
- Mental (incompetency).
- Legal or statutory:
Corporations have forfeited their charters.
Conveyances by one married person without the joinder of spouse.
Conveyances by straw parties.
Conveyances by unincorporated associations without execution by trustees.
Conveyances by debtors in bankruptcy.
The effect of a disability is to make the deed, depending on the circumstance, either void or voidable.
Grantor's Spouse -
Generally, it is necessary for the grantor's spouse to join in the execution of the deed. It is certainly required to convey an interest in homestead property.
Parties - Grantees
Identify - Every deed must have a grantee capable of holding title. A deed without a grantee is totally inoperative as a conveyance. As long as the name of the grantee is left blank in a deed, legal title to the property does not pass.
The grantee must be designated in such a manner as to be fully ascertainable and identifiable. However, statutory and judicial law must be fully researched in this respect for possible deviations.
Kinds - Grantees may be divided into the following categories:
- Legal entities (corporations, partnerships, limited partnerships, joint
ventures, trusts, etc.)
- Parties acting in certain legal capacities and under proper authority (fiduciaries, agents, executors, administrators, etc.)
Capacity - An effective deed requires a grantee with capacity to acquire and hold the title of the property or the interest being conveyed.
The capacity to take and hold title to real property is greater then the capacity to transfer it.
Generally, the grantee's capacity is determined by state law.
Disabilities - Neither minors nor mentally disabled persons experience any kind of disability when being named as grantees.
In general terms, a grantee's disabilities may be grouped as follows:
- Those pertaining to statutory entities lacking legal capacity at the time
of the execution of the instrument because:
they are not in existence.
they are not properly organized.
they are not recognized by statute.
their chapters had been forfeited, canceled, revoked, or suspended.
- Aliens (in some jurisdictions). See Alien and Aliens' Investments, Section
- Heirs or devisees of living persons.
- Fictitious names.
- Unborn persons. Exceptions: (1) a grant may be made
to a trust for the benefit of unborn children; (2) when the deed is by way of
- Dead persons.
The consideration for a deed is the price paid for the property. Modern statutes and judicial decisions generally presume the existence of a consideration.
The consideration in a deed may be either good or valuable. A good consideration may proceed from love and affection or the like, and have no pecuniary measure of value. A valuable consideration is money or its equivalent; that is, anything capable of being measured by a monetary standard. The practice of inserting a dollar as consideration is sufficient for the requirements of the law. A conveyance for no consideration at all will not be entitled to the protection of the recording act.
Despite the increasing dispensation with the requirements of consideration, the absence or inadequacy of consideration may have collateral consequences such as the voidability of the conveyance at the behest of prior and unpaid creditors under the Bankruptcy Code.
Operative Words Of Conveyance
In order to be valid, a deed must contain appropriate words of conveyance that manifest the intention of the grantor to divest itself of the title and or an interest therein to convey it unto the grantee. These words of conveyance, also termed words of grant or operative words, constitute the granting clause of the deed. Depending on the jurisdiction, the interest being conveyed and the warranties given by the grantor, these words are:
"grant and convey"
"grant, bargain, and sell"
"warrant and convey"
"sell and convey"
"grant, bargain, and sell, convey, and confirm"
A deed containing no words of grant conveys no title.
The habendum clause ("to have and to hold"), where used, operates to define the quantity of estate which the grantee is said to have in the property granted. The estate granted may be limited in the earlier part of the deed and if the habendum contradicts the earlier limitation, it will have no effect. If the two can be reconciled, then effect will be given to both.
In modern conveyances, the habendum clause is generally a useless repetition of what has already been given. It is entirely omitted from the statutory forms and is a nonessential element in all forms of deeds.
In general, a recital is a statement in a deed relatiing to some matter that affects either the subject transaction or the prior chain of title.
Recitals may occur in any portion of a deed. Recitals may be used:
- To further identify the parties,
- To explain a grantor's chain of title, especially if by descent,
- To explain the reason for or purpose of the conveyance,
- To designate the encumbrance, if any, against the property,
- To set forth the date of transfer of possession, or other agreement of
the parties in relation to the transaction, and
- To identify the form of tenancy
Covenants Of Title
Covenants of title, also referred to as warranties of title, are assurances, guarantees, promises, or representations made by the grantor to the grantee with respect to the title of the property being conveyed.
These covenants or warranties differ somewhat in their scope, depending on the local practice, but those frequently encountered are as follows:
Covenant of Seisin
The covenant by a grantor that the grantor is lawfully seised of the granted premises is frequently present in a conveyance of land. The significance of this covenant depends upon the local content of the term. To the extent that seisin denotes those rights constituting ownership, as distinguished from possession, the covenant constitutes an affirmation of a legal status and permits recourse against the covenanting grantor only when an absence of the stipulated legal right can be proved.
Sec. 5.023, TX Property Code provides that all deeds imply that the grantor has not previously sold the property to anyone else.
Covenant of Encumbrances
The covenant of encumbrances is a covenant by a grantor that there are no encumbrances on the land except as stated in the deed. See Sec. 5.002, TX Prop. Code.
Covenant of Warranty (must be expressed, not implied)
The covenant of warranty is a covenant by a grantor agreeing to compensate the grantee for any loss that may be sustained by virtue of a failure of the title which the deed purports to convey.
Other rights may be set out in the deed as determined by the parties.
Execution of Deeds
The execution of the deed is the actual signing of the deed by the grantor or by the grantor's authorized agent. Execution is an essential element to the validity of a deed.
Sec. 11.003 requires the grantees' address to be set out in the deed.
Signatures do not need to be legible.
In the majority of jurisdictions, seals are no longer essential to the validity of a deed. But, in a few states, their use is still necessary. Sometimes, the technical requirement for a seal is satisfied by merely writing the word "L.S." for locus sigilli, meaning "the place of the seal" next to a signature.
In Texas, for title insurance purposes, a seal is unnecessary.
Witnesses - Attestation
Sec. 12.001 provides that a deed must be acknowledged, sworn to with a proper jurat or proved according to law. If any grantor has signed by mark, the deed should have two or more witnesses.
Title companies generally require all documents affecting real estate to be acknowledged rather than witnessed.
See Also: 4.24 Delivery.
To be valid, a deed must be delivered during the lifetime of the grantor. The delivery of a deed usually is accomplished by direct delivery to the grantee. However, it can be effected by unconditional delivery to a third party for delivery to the grantee at some later date, even after the death of the grantor. The recording of a deed by or at the direction of or with the approval of the grantor constitutes delivery. No particular form or ceremony is necessary to constitute a delivery of a deed.
Void and Voidable Deeds
A voidable deed is capable of being either avoided or confirmed. The deed may appear to be valid and enforceable on its face, but is subject to voidance by a party who acted under a disability. Voidable deeds pass title subject to being set aside in appropriate judicial proceedings.
A void deed is one invalid in law for any purpose whatsoever. Void deeds pass no title to real property even in favor of bona fide purchasers.
Examples of a void deed would be:
- one procured by fraud
- A deed intended as a mortgage in violation of the Texas Constitution
- A deed executed by an attorney in fact after the death of the principal.
See Slaughter v. Qualls, 139 Tex. 340 (Tex. 1942).
Construction Or Interpretation Of A Deed
Rules of deed construction and interpretation must be deferred to courts of law. Typical situations requiring a judicial determination are the following:
- Impossibility to ascertain fully:
The nature of the interest being conveyed, or
The quantum of the interest being conveyed, or
The parties to whom the interest is being conveyed, or
The form of tenancy or ownership being created.
- Discrepancies between the granting clause and any other qualifying clause
- Conflicts between the printed and the handwritten or typed part of a deed.
- The legal description being vague, imprecise, or indefinite.
The doctrine of after-acquired title, provides that when a grantor who does not have title to real property (or whose title is defective at the time of the conveyance), executes a deed to a grantee, and the grantor later acquires title to the property, then title flows automatically to the grantee.
If your claim of title appears to include after-acquired title, you may wish to consult a Texas Underwriter.