On Deeds

admin  -  Jul 15, 2012  -  No Comments

There is no “standard form” for a deed, although Texas does have certain rules that apply if a deed is to be valid. For instance, the intent to convey property must be clear from the wording; the property must be sufficiently described; and the deed must be signed and acknowledged by the grantor. Having said this, it is not true that all deeds are created equal. In particular, when it is a grantor’s intention to accomplish a specific objective and limit liability in doing so, the form and wording of a deed can be critically important. Always consult a real estate attorney when contemplating the transfer of property.

This article will briefly describe different types of deeds that are commonly used for different purposes in Texas. For additional information, it is suggested that the reader also consult our related articles, including Co-Ownership of Property in Texas, Deeding Property into an LLC, and Deeding Property to the Lender.
Must Deeds be Recorded to be Valid?

No. 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. When this is done, the transfer is fully effective between grantor (seller) and grantee (buyer). Recording merely gives notice to the world of the transfer and, of course, establishes priority in the event an unscrupulous seller gives more than one deed to the property.
Recording makes it easier for title companies to research and insure the chain of title. Title companies insist on recording for this reason. Recording will also inform the taxing authorities where they should send the ad valorem tax bill.
Executing and delivering a deed without immediately recording it can be a useful, inexpensive estate planning device – what this author calls “the deed in the drawer.” If, for example, a parent wants to insure that her property is transferred without probate or other difficulty upon her death, then she could sign a deed now that would be held and not recorded until she passed. This is entirely legal.

One more comment relating to the timing of deeds – the doctrine of “after acquired title.” If I give you a deed today to property that I do not yet own, it of course has no effect; but if I actually acquire that property next week, then the deed I gave you comes to life and the property is yours.