When is a Writing or Defective Deed "Good Enough" to Convey Real Estate in Texas?

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

Many times, real estate lawyers (in San Antonio, TX and elsewhere) are called upon to opine on the validity and effectiveness of less-than perfect writings intended to grant/transfer/convey interests in land. These documents come in all shapes and forms -- from template documents missing essential details, to scribbled writings on the back of beer coasters.  Irrespective of the form of such a writing, the analysis of whether they are "good enough" to convey ownership falls upon their substance, as judged by  somewhat mundane criteria prescribed by two Texas statutes.

To validly convey an interest in land, a document (including a contract for the sale of real estate, a Contract for Deed, a deed, and/or any other writing) must satisfy the requirements of both the "statute of conveyances" (located at Texas Property Code section 5.021), and the "statute of frauds" (located at Texas Business and Commerce Code section 26.001). 

To be enforceable and comply with the statute of frauds, a document purporting to transfer/grant/convey an interest in real property must be in writing and signed by the person to be charged with the agreement. TEX. BUS. & COM.CODE ANN. § 26.01(a), (b)(4) (Vernon 2009); Cate v. Woods, 299 S.W.3d 149, 152 (Tex.App.-Texarkana 2009, no pet.). 

To convey an interest in land under the statute of conveyances, the instrument of conveyance must be in writing, must be signed, and must be delivered by the party disposing of his interest. TEX. PROP.CODE ANN. § 5.021 (Vernon 2004); Thompson v. Clayton, 346 S.W.3d 650, 656 (Tex.App.-El Paso 2009, no pet.); McDaniel v. Carruth, 637 S.W.2d 498, 505 (Tex.App.-Corpus Christi 1982, no pet.).

In essence, the instrument conveying the land must contain the essential characteristics of a deed. See TEX. PROP.CODE ANN. § 5.021; see Green v. Canon,33 S.W.3d 855, 858 (Tex. App.-Houston [14th Dist.] 2000, pet. denied). There is, however, no longer a requirement that a deed or instrument to effect the conveyance of real property must have all the formal parts of a deed recognized at common law or technical language. Green, 33 S.W.3d at 858; see also Marrs & Smith, P'ship, v. D.K. Boyd Oil & Gas Co., No. 08-00-00386-CV, 2002 WL 1445334, at *5 (Tex.App.-El Paso July 3, 2002, no pet.) (not designated for publication). 

Rather, if (1) from the instrument as a whole a grantor and grantee can be ascertained and (2) there are operative words or words of grant showing an intention by the grantor to convey to the grantee title to a real property interest, (3) which is sufficiently described, and (4) the instrument is signed and acknowledged by the grantor, then the instrument of conveyance is a deed that accomplishes a legally effective conveyance. Green, 33 S.W.3d at 858; Marrs & Smith, 2002 WL 1445334, at *5.

Language in an instrument that contemplates future action is not language that contemplates a completed transaction in land. See Green, 33 S.W.3d at 859 (holding attempted gift of land invalid where contemplated future action evidenced "an intent to make a gift in the future rather than a completed gift"); see also Marrs & Smith,2002 WL 1445334, at *6 (finding that agreement purportedly conveying interest in land did not evidence present intent on part of alleged grantor to convey interest in land where agreement contemplated obligation to convey interest upon occurrence of specific future event).

Understanding (Without Abusing) the Texas Correction Deed

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

In my practice as a real estate attorney in San Antonio, Tx, I have probably been more entertained and perplexed by "Correction Deeds" than any other document (except, perhaps, the Contract for Deed). Over the years, Clients and opposing parties, alike, have presented me "Correction Deeds" drafted and recorded for all manner of improper purposes, including to change the name of the grantee, to change the property being conveyed, and to add additional (or even new) grantees who were not parties to the original deed.

While the term "Correction Deed" would tend to indicate that this document is a "cure-all," Texas law narrowly limits the the proper use and scope of the Correction Deed. 

The historical purpose of Correction Deeds is to reform and correct erroneous deeds without undertaking the hassle and expense of court proceedings (i.e. lawsuits). See Doty v. Barnard, 92 Tex. 104, 47 S.W. 712, 713 (1898) (stating that use of a correction deed was proper "to correct the defects and imperfections of the deed above referred to, and had the same effect upon the rights of the parties that a judgment of court would have had"). Even upon recognition of this historical purpose, Texas courts have routinely held that the proper use of a correction deed is narrow in scope. See, e.g., Adams v. First Nat'l Bank of Bells/Savoy, 154 S.W.3d 859, 871 (Tex. App.-Dallas 2005, no pet.) ("A correction deed is filed for the sole purpose of correcting some facial imperfection in the title."). Stated differently, substantive changes to an original deed are not appropriately made through a Correction Deed.

Courts in Texas have recognized that preserving the narrow circumstances for acceptable use of a correction deed is important, among other reasons, because a proper correction deed may relate back to the date of the original deed it corrects. See Doty, 47 S.W. at 714. see also Wilson v. Dearing, Inc., 415 S.W.2d 475, 479 (Tex. Civ.App.-Eastland 1967, no writ) ("The correction instrument related back to and became effective as of the time of the instrument it purported to correct."); Adams, 154 S.W.3d at 871 ("Ordinarily, a correction deed relates back to the date of the document that it purports to express more accurately.").

Some examples of PROPER uses of correction deeds are:

•  to correct a defective description of a single property when a deed recites inaccurate metes and bounds. E.g., Doty, 47 S.W. at 712 (enforcing a deed correcting an improper acreage description). 
• to correct a defective description of a grantor's capacity. E.g., Humble Oil & Refining Co. v. Mullican, 144 Tex. 609, 192 S.W.2d 770, 771-72 (1946) (enforcing a correction deed stating that a grantor was "community administrator" of an estate under the probate code, not "independent executor" as stated in the original deed).

By contrast, Courts have held that the following uses of correction deeds are IMPROPER:

• to convey an additional, separate parcel of land not included in the original deed See Smith v. Liddell, 367 S.W.2d 662, 666 (Tex.1963) (refusing to enforce a correction deed purporting to convey a mineral interest in an additional 71.446-acre tract from a separate survey where the first deed mistakenly conveyed only an interest in a 152.11-acre tract); 
• To correct a mistake of omitting a second property from a Substitute Trustee's Deed following a foreclosure. see Myrad Props., Inc. v. LaSalle Bank Nat'l Ass'n, 300 S.W.3d 746, 753 (Tex.2009).
• to change the fractional interest of a mineral estate, or change a mineral interest to a royalty interest Halbert v. Green,156 Tex. 223, 293 S.W.2d 848, 852-53 (1956).

It is worth noting that an invalid Correction Deed that purports to convey an ownership interest in realty is VOID. A void instrument does not and connote convey interest in real estate.  Thus, even where the parties to a transaction intended otherwise, defective Correction Deeds are legal nullities, that accomplish no transfer of title.

Texans should use the Correction Deed sparingly, and view title conveyed by such deeds with a slight degree of skepticism. Form over substance is the general rule when determining which defects in an original deed may be corrected by a Correction Deed.