WHEN is a Texas Deed Effective? Date of Recording is Not Controlling.

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

Many legal disputes related to Texas real estate require determination of WHEN a conveyance of an interest in real property occurred. In fact, many lawsuits have been fought for the sole purpose of determining when title is conveyed and a conveyance takes effect;  and, resolution of that issue can have tremendous implications.

Under Texas law, a conveyance of an interest in real property must meet the following 3 criteria:

1) be in writing, 

2) be signed by the grantor, and 

3) be delivered to the grantee  

See Tex. Prop.Code § 5.021  

Significant by its absence from those criteria is a requirement that a conveyance instrument (typically a deed) be recorded with the County Clerk or any other governmental agency.  This is because in Texas a deed does not have to be recorded to convey title. Thornton v. Rains, 157 Tex. 65, 299 S.W.2d 287, 288 (1957); Burris v. McDougald, 832 S.W.2d 707, 709 (Tex.App.-Corpus Christi 1992, no writ). Stated simply, the act of filing or recording a deed is not the act which operates to convey title to real property. Adams v. First Nat'l Bank of Bells/Savoy, 154 S.W.3d 859, 869 (Tex. App. Dallas—2005, no pet.). Rather, a conveyance is effective and title is conveyed when an executed deed has been delivered to the grantee. Id.; see also, Stephens County Museum, Inc. v. Swenson, 517 S.W.2d 257, 261 (Tex.1974);Hicks v. Loveless, 714 S.W.2d 30, 32 (Tex.App.-Dallas 1986, writ ref'd n.r.e.); Rothrock v. Rothrock, 104 S.W.3d 135, 138 (Tex.App.-Waco 2003, pet. denied).

What constitutes a "delivery" of a deed is a question of law for a Court to determine. Ragland v. Kelner, 148 Tex. 132, 221 S.W.2d 357, 359 (1949); see also Rothrock, 104 S.W.3d at 138. Whether there has been a delivery of a deed is a fact question, which should be resolved by a jury. Ragland, 148 Tex. 132, 221 S.W.2d at 359; see also Rothrock, 104 S.W.3d at 138.

Although the factors and analysis of whether a deliry has occurred, generally speaking, two

elements must be established to prove delivery of a deed: (1) the deed must be delivered into the control of the grantee, and (2) the grantor must intend the deed to become operative as a conveyance. Binford v. Snyder, 144 Tex. 134, 143-44, 189 S.W.2d 471, 475 (1945); Hicks, 714 S.W.2d at 32; see also Bellaire Kirkpatrick Joint Venture v. Loots, 826 S.W.2d 205, 213 (Tex.App.-Fort Worth 1992, writ denied);Raymond v. Aquarius Condominium Owners Ass'n, Inc., 662 S.W.2d 82, 91 (Tex.App.-Corpus Christi 1983, no writ); Bennett v. Mings, 535 S.W.2d 408, 409 (Tex.Civ.App.-Texarkana 1976, writ ref'd n.r.e.).

In the end, the question of whether a deed has been delivered is primarily one of the grantor's intent. Raymond, 662 S.W.2d at 91; Bennett, 535 S.W.2d at 409. The intent of the grantor is determined by examining all the facts and circumstances preceding, attending, and following the execution of the deed. Stephens, 517 S.W.2d at 262; Rothrock, 104 S.W.3d at 138; see Thornton,299 S.W.2d at 288. 

Litigating the effective date of a conveyance, and trying to prove that a deed's effective date pre-dates the date of recording are complex legal issues. The facts and circumstances surrounding every deed are different, but at the end of the day, an experienced real estate litigation attorney can help you navigate the legal minefield associated with establishing the Effective Date of a deed in Texas.

Even Missing Documents Forming a Title Chain Can Have Serious Implications on Real Property Use

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

When considering the purchase of residential or commercial real estate in Texas, it is of the utmost importance for the Buyer to obtain a full abstract of title, and to obtain copies of all documents comprising a particular property's chain-of-title.

So important is having this information, that the laws pertaining to real estate agents in Texas mandates that real estate licensees include in all purchase offers a written notice to each buyer that he or she should (among other things) “have the abstract covering the real estate that is the subject of the contract examined by an attorney chosen by the buyer.” See Texas Occupations Code § 1101.555. 

A cursory examination of the law pertaining to the effect of chain of title documents reveals part of the reason having this information is essential to a Buyer and his plans for the property.

First, the Texas Property Code Section 13.002(1) expressly provides that “an instrument that is properly recorded in the proper county is notice to all persons of the existence of the instrument.” This means that failure to obtain a copy of the instrument, or to discover its contents has no bearing on the validity and enforcement of the instrument. Put simply: if a document is on file, you have imputed knowledge of its existence. 

However, proper recordation of an instrument is not the SINE QUA NON of its validity and enforceability. The Texas Supreme Court has recognized two rules relating to the purchase of real property, the second of which can produce harsh results:

1.      "A purchaser is charged with knowledge of the provisions and contents of recorded instruments;”  and

2.     “Purchasers are also charged with notice of the terms of deeds which form an essential link in their chain of ownership."  

See Cooksey v. Sinder, 682 S.W.2d 252 (Tex.1984) (per curiam) see also Peters v. Clements, 46 Tex. 114, 123 (1876).  

The second of these rules ("subsequent purchasers are bound by the recitals in the deeds through which they claim") applies regardless of whether the purchaser read the prior deeds or had any actual knowledge of their contents.

In some situations, a restriction prohibiting the use of a property for a particular purpose or in a particular manner (mobile home, retail gas business, sexually-oriented business, for multi-family residence, etc.) may not appear in the most recent deed by which the property was conveyed to (or “vested in”) a Seller.  However, if that restriction appears in an earlier deed affecting the property, the restriction will likely apply – sometimes even if that earlier deed is not recorded.  See generally City of Dallas v. Rutledge, 258 S.W. 534, 539 (Tex.Civ.App.-Dallas 1924, no writ) ("The law of notice is that a purchaser of land must take notice of all instruments recorded or unrecorded in his chain of title or affecting title, and is bound by all recitals therein, although in fact ignorant of the contents."); Matthews v. Rains County, 206 S.W.2d 852, 854 (Tex.Civ.App.-Amarillo 1947, writ ref'd n.r.e.) ("[The purchaser] is bound by every matter contained in or fairly disclosed by any instrument which forms an essential link in the chain of title under which he claims ... even though he had never read these instruments or had any actual knowledge of their contents, and this would be true regardless of whether the instruments were recorded.").

In addition to restrictions, easements and other encumbrances (roadways and access licenses) upon real property are implicated by title chains, even if not readily apparent from the immediate transaction.  See Adams v. Rowles, 228 S.W.2d 849, 853 (Tex. 1950) (respondent's chain of title showed dedication of roadway, and respondent was charged with knowledge of its existence and "took his land burdened with the roadway"); McDaniel v. Calvert, 875 S.W.2d 482, 484 (Tex. App.-Fort Worth 1994, no writ) (transfer of dominant estate "automatically includes the [appurtenant] easement across the servient tenement's land" regardless of whether easements are referenced in deed or not).

The foregoing demonstrates the serious implications of documents comprising a property’s chain-of-title.   Obtaining copies and qualified review of those documents is an essential component of a Buyer’s due diligence analysis of the feasibility of purchasing real estate in Texas.  Failure to learn and understand all instruments forming the chain of title can be costly and disasterous.

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.