07 Sep Free Act & Deed – 11 Types of Real Estate Deeds in Texas
There are at least 11 types of deeds in Texas used in the transfer of real estate. Since deeds should be recorded in the deed records in the county where the property is located to give notice to the world, deeds should be notarized. The following are some of the types of deeds in Texas:
- General Warranty Deed – Protects the buyer of real estate from all title defects incurred prior to the buyer’s purchase of the property – even if the seller didn’t know of the defect. Typically, the buyer is mostly concerned that there are no debts or liens against the property purchased, but there can be other defects as well. If there is a defect, then the purchaser can require the seller to solve the issue. As a result, title insurance is often purchased for the security of the purchaser.
- Special Warranty Deed – Protects the buyer from title defects that occurred when the seller owned the property. So, if there was judgment against the property prior to seller owning the property, the purchaser would not be protected. Typically, special warranty deeds are used after a foreclosure or property seizure.
- Quitclaim Deed – These deeds give the purchaser no protection or warranty at all. As a result, this would not be desired by title companies. There is no guarantee of full ownership of the property or that there are no debts or liens. Sometimes these deeds are used when money is not exchanged for property (although Gift deeds are sometimes used to give warranty of title). In Texas, quitclaim deeds are more of a release of a claim of title. The grantor may not even have an interest in title.
- Deed without Warranty – This is a conveyance of property (unlike a quitclaim deed), but it also has no warranty of title. This is sometimes used to clear up title problems – although it is not used very often since it lacks warranties.
- Grant Deed – This deed implies covenants of title (although not stated in the deed). The seller of the property guarantees there is no conveyance of the property to anyone other than the purchaser and that nothing could stop the transfer.
- Transfer on Death Deed – This type of deed transfers property at the time of death of the owner. There are no warranties of title. The legislature passed the usage of this type of deed since so many Texans failed to have wills. It is simple to create, and you can cancel if you change your mind. However, there are many problems with transfer on death deeds. See our article “12 problems with TODD” by clicking here.
- Deed with reservation of life estate – Unlike the TODD, a deed with reservation of life estate is made with warranty of title (either a special or general warranty deed). A Ladybird deed is a form of a life estate deed – the grantor just retains more powers. The grantor retains rights to sell, lease, mortgage or even change his or her mind as to whom the grantee would be – which is why Ladybird deeds are often referred to as enhanced life estate deeds. If the life estate deed is not a Ladybird deed, then the grantees have an immediate interest and the grantees could transfer their remainder interest.
- Deed of Trust – This is not really a deed – it is more like a mortgage in Texas when the grantor borrows money to purchase the property. The grantor (as a borrower) of this deed grants a lien against the property to secure payment of a note by the grantor to the lender. The trustee (often a title company) of the deed of trust can foreclose on the property without going to court if the grantor is delinquent or fails to pay the lender or fails to otherwise comply with the covenants in the deed of trust to secure the lender.
- Fee Simple Determinable Deed – When a condition (as set forth in the deed) is not met or is violated, a fee simple determinable automatically ends the interest in of the grantee and automatically reverts back to the owner (grantor).
- Fee Simple Subject to Condition Subsequent Deed – Unlike a fee simple determinable deed (although it is a form of a fee simple determinable deed), the owner has the right to retake the property if the condition is violated – but is just an option (it doesn’t automatically revert to the owner).
- Fee Simple Subject to Executory Limitation Deed – Similar to a fee simple determinable deed (although it is another type of fee simple determinable deed), except the property could go to some party other than the owner if the condition is not met or violated.
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