Let’s talk deeds, as in Warranty Deeds, Special Warranty Deeds, Deeds of Gift and Lady Bird Deeds. It can be a bit mind-numbing.
A deed is the document used to transfer title to real estate in Texas. When you sell land, the typical form of the deed used is a warranty deed. There is a basic form in the Texas Property Code. This type of document gives the property with a covenant of general warranty. That is a fancy way of saying that the seller guarantees that he is the owner of the property being transferred and that there are no undisclosed encumbrances, such as a hidden pipeline. If it turns out that there is an encumbrance, then the seller would be liable to buyer for damages.
The seller, by the way, is called the Grantor. The person receiving the title is called the Grantee.
So, in most situations, the Grantor conveys the property to the Grantee by way of a warranty deed. There is some magic language that is included in the granting clause that signals to everyone that there is a general warranty. Part of it reads that “….Grantor binds Grantor and Grantor’s heirs and successors to warrant and forever defend all and singular the Property to Grantee and Grantee’s heirs, successors and assigns, against every person whomsoever lawfully claiming or to claim the same of any part thereof….” It’s a bit wordy, but all of the words are important.
Suppose, however, that the Grantor isn’t sure what is under the ground and doesn’t want to give a general warranty on the property. Then the Grantor would sign a special warranty deed, which would add the following language to the end of the above phrase from the granting clause: “….when the claim is by, through, or under Grantor but not otherwise….” Now, if there is a pipeline later found, the Grantor would not be liable to the Grantee.
Sometime the Grantor isn’t sure exactly what he owns. In this case, the Grantor can’t warrant title to the property. The Grantor then conveys what he owns, but is not warranting that he owns anything. The deed would state that he assigns his interest without express or implied warranty, and further excludes common law and statutory warranties.
See how fun this is?
A Lady Bird Deed, known as an enhanced life estate deed, is a special kind of transfer. The grantor transfers the property to the grantee, but reserves a life estate and the power to sell the property. This type of deed is commonly used for grantors who are on Medicaid and do not want the property subject to the State’s recovery program.
A Deed of Gift conveys title for the consideration of “love and affection,” and usually recites that phrase. It can be written with no warranty, a special warranty or a general warranty.
You’ve probably noticed that the wording on a deed makes a huge difference. It’s best to retain an attorney to prepare a deed.
Hammerle Finley Law Firm. Give us a call. We can help.
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The information contained in this article is general information only and does not constitute legal advice.