When is a Texas Deed Valid? The answer is NOT on the day it was Recorded

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

In many real estate disputes, the date upon which title or ownership to real property is transferred is of great significance. Far more often than one would expect, a deed or other conveyance is signed and delivered by the parties, but never recorded, or not recorded until much later (sometimes several years later). In those instances, a question arises as to the date of transfer of ownership. Fortunately, Texas law speaks directly to this issue.

Texas Property Code Section 13.001 provides (in relevant part):

               Sec. 13.001. VALIDITY OF UNRECORDED INSTRUMENT. 

   (a) A conveyance of real property or an interest in real property or a mortgage or deed of trust is void as to a creditor or to a subsequent purchaser for a valuable consideration without notice unless the instrument has been acknowledged, sworn to, or proved and filed for record as required by law.

   (b) The unrecorded instrument is binding on a party to the instrument, on the party's heirs, and on a subsequent purchaser who does not pay a valuable consideration or who has notice of the instrument. 

Courts have interpreted this statute to mean that under Texas law, a deed becomes valid and enforceable as to the grantor and grantee upon delivery (and not recordation) of the deed. Tex. Prop. Code Ann. § 5.021 (Vernon 2004); Noell v. Crow-Billingsley Air Park Ltd. P'ship, 233 S.W.3d 408, 415 (Tex. App.-Dallas 2007, pet. denied); Hidalgo County Appraisal Dist. v. HIC Texas I, L.L.C., No. 13-07-083-CV, 2009 WL 620468, at *2 (Tex. App.-Corpus Christi Mar. 12, 2009, no pet.) (mem. op.); Watson v. Tipton, 274 S.W.3d 791, 799 (Tex. App.-Fort Worth 2008, pet. denied).

Delivery of a deed has two elements: (1) the grantor must place the deed within the control of the grantee (2) with the intention that the instrument become operative as a conveyance. Noell, 233 S.W.3d at 415. The question of delivery of the deed is controlled by the intent of the grantor, and it is determined by examining all the facts and circumstances preceding, attending, and following the execution of the instrument. Id. Thus, recording a deed is not necessary to pass title; an unrecorded deed is binding on the parties to the conveyance. Id. at 416-17 (citing Tex. Prop. Code Ann. 13.001(b)). 

With regard to third parties, the law is different depending upon the terms of the purchase of property subject to an unrecorded deed: An unrecorded conveyance of an interest in real property is void as to a subsequent purchaser who purchases the property for valuable consideration and without notice. Tex. Prop. Code § 13.001(a). However, the unrecorded instrument is binding on a subsequent purchaser who does not pay a valuable consideration or who has notice of the instrument. Id. § 13.001(b). Thus, to receive the bona fide purchaser protection, a party must acquire the property in good faith, for value, and without notice (actual, constructive or imputed) of any third-party claim or interest. Madison v. Gordon, 39 S.W.3d 604, 606 (Tex.2001) (per curiam); Pierson v. McClintock, 34 Tex.Civ.App. 360, 78 S.W. 706, 707-08 (1904, no writ).

Seemingly minor distinctions can be determinative with regard to the validity, enforceability and timing of unrecorded deeds. If a question arises as to the enforceability of an unrecorded deed, you should contact an experienced real estate attorney for guidance.