Purchasing real estate involves signing a great deal of paperwork and documentation. Perhaps the most important document involved in the entire transfer of real property is the deed. Deeds complete the transfer of ownership between the seller and the buyer. Depending on the terms of the sale, different types of deeds can be used to convey ownership. Texas recognizes warranty of title deeds to complete transfers of residential real estate between individuals.
What Is a Texas Warranty Deed?
In the state of Texas, warranty deeds are commonly used to transfer property from the owner of the property to another party. Warranty deeds document the transfer of ownership between two parties. The warranty is a seller’s guarantee that they hold a free and clear title. The seller, or grantor, uses the warranty deed to convey their sole and rightful ownership rights over a property to the buyer, or grantee.
Most deeds contain language stating implied warranties, according to TexasLawHelp.org, but they offer limited protection for buyers. The language of a warranty deed is more specific in what it states regarding the seller’s responsibility for the property title. This type of deed will include seller guarantees that the title to the property is clear of any third-party claimants, and there are no encumbrances.
If a problem with the title occurs, such as the discovery of an easement, the seller will aid the buyers in resolving issues covered by the warranty around the real estate transaction. In contrast, a deed without warranty means the seller is making no guarantees about the title. Sellers may not even be aware of all title issues attached to a property. This is a large part of why closing is such an involved process requiring title insurance. If you are concerned, Texas Real Estate Research Center suggests asking your title company or licensed attorney about additional options for protection.
Are There Different Warranty Deed Types?
Two types of warranty deeds can be used in Texas: the general warranty deed and the special warranty deed. Although these property deeds function differently in terms of guarantees from the seller, they both function to convey property ownership in the same way.
Texas general warranty deeds offer the most protection to buyers. This deed implies that the previous owner will protect the new owner in the case of title defects that occurred both before and during their course of ownership.
A special warranty deed only holds the seller responsible for title problems that occurred while the current owner possessed the property. These include liens placed on the property because of unpaid taxes or quitclaiming the property to someone else without recording the deed of trust. A foreclosed property often has a special warranty deed because the bank may not have full information about liens or claims resulting from prior ownership.
What Information Goes on a Deed?
There is no standard Texas warranty deed form, but all sales or conveyances to a new owner must be in writing and must satisfy the basic requirements outlined by Property Code 5.022(a). The deed should follow a template clearly identifying the parties and outlining intent to convey the title. Grantors must sign the warranty deed as a guarantee for the title. All signatures must be original and acknowledged by a notary public. Finally, a complete legal description of the property must be included with the deed.
All warranty deeds should be filed on record with the county clerk's office. If the deed meets all county clerk requirements, it will be recorded, and the deed will become public record. Failing to properly record and register a deed can put a property at risk for claims. Consider seeking legal advice from a real estate attorney to review whether a transfer of property ownership correctly follows all Texas laws and property codes.
Hashaw Elkins is a financial services and tax professional, as well as a project management consultant. She has led projects across multiple industries and sectors, ranging from the Fortune Global 500 to international nongovernmental organizations. Hashaw holds an MBA in Real Estate and an MSci in Project Management. She is further certified in organizational change management, diversity management, and cross-cultural mediation.