Are Quit Claim Deeds Legal in Texas

Deeds are the legal documents used to transfer ownership of legal ownership. A deed of guarantee, also known as a general warranty deed, is an act that makes and guarantees specific commitments regarding the owner`s claim to title. Deeds of renunciation are a form of transfer of ownership that derives its appeal from the fact that it is a fast, efficient and cost-effective way to transfer real estate. While this is true in some limited circumstances, the nature of Texas law makes acts of waiver almost useless in many circumstances. In fact, their use is so limited that title and insurance companies in Texas often refuse to work with them. While acts of renunciation are legal in all 50 states and are commonly used in most of them, Texas is an exception. The path to the problem is a single section of the Texas real estate code that essentially states that property transfers not registered in the past are binding on subsequent buyers. This has led to the majority of Texas insurance companies refusing to insure home titles with acts of renunciation in the chain of titles. Therefore, acts of quitclaim in Texas should be seen as red flags for potential buyers. The nature of an act of waiver should make the buyer cautious.

Simply put, the buyer receives a deed that purports to transfer part of the ownership, but makes no warranties or guarantees regarding that claim. It is possible that a fellow will provide valuable consideration for a resignation request certificate that does not provide for any claim to anything and has no recourse against the seller. Acts of renunciation are the ultimate „buyer`s caution“ in real estate transactions. When dividing property for divorce, an act of renunciation can be a useful tool. As a result, the courts did not accept the registered acts of termination as valid for the purposes of the five-year limitation period of unfavorable possession. And now, under the new amendment to the Texas Real Estate Act, this is confirmed in the law. No one may claim land under the five-year limitation period for unfavorable possession on the basis of an act of renunciation. Buyers only use quitclaim acts in Texas in certain circumstances. An example is when there is a gift between family members or close friends. If you are the buyer or recipient of the gift, do not accept an act of renunciation unless you really know and trust the seller. Otherwise, you could get a worthless piece of paper.

Thomson Reuters Practical Law: Texas Law provides Guidance on the Effect of Quitclaim Deeds (June 8, 2021). Although an act of renunciation is a common way to transfer ownership, it is possible to legally challenge one. ☛ How do owners remove a title that could be tainted by unregistered claims? Check out our overview: What is a silent title action? These differences in language may seem subtle, but there are reasons for this. For acts of renunciation and unsecured acts, the person signing the deed is not responsible for problems related to the title. But a person who transfers property by deed of renunciation does not claim to give a clear title to the person who receives the property. Instead, the person signing the deed simply gives any interest in the property they own to the person named in the deed. An unsecured deed, including the phrase „grant, sell and transfer“, specifies that the person is actually transferring the property. If you`re still a little confused about what an act of renunciation is and how to use it, you`re not alone. Deeds are part of a complex legal framework in which real estate lawyers find their way around. However, understanding when acts of waiver are typically used can provide you with a better understanding. The resulting change in Texas property rights was SB 885. It does not represent complete protection in good faith, but it supports subsequent buyers, lenders and title insurers by creating clear boundaries.

Property disputes by third parties due to termination claims must be made within four years from the date of registration of the withdrawal, otherwise they are time-barred. And it removes question marks for future buyers, lenders, and securities companies that rely on deed registrations to establish a good title. Property buyers are not the only ones who are wary of acts of renunciation. In Texas, securities companies and insurers are very often reluctant to insure an act of waiver, and for good reason. Under Texas law, buyers who use a waiver deed will be charged with a title notice, whether or not those defects appear in the property`s records. This means that even if a title search shows no defects in a property, an unregistered prior interest transfer is still considered superior to the exit transfer, even if the buyer has no idea that the previous transfer took place. This makes securities insurers cautious for obvious reasons: it can be extremely difficult, if not impossible, to determine whether an act of waiver transfers a valid interest rate. A severance claim in the chain of title may exclude a Texas property for title insurance coverage. For this reason, Texans may have avoided abandonment requests, and Texas lawyers have generally cautioned against their use. „The root of the problem is a single section of the Texas real estate code that essentially states that property transfers not registered in the past are binding on subsequent buyers,“ observed a Texas attorney, adding that quitclaim acts in Texas „are considered red flags for potential buyers.“ Although the deed sells and transfers ownership to the buyer without warranty, it is only slightly better than an act of renunciation. It transfers ownership to the buyer, but there is no warranty against defects in title.

Therefore, a buyer cannot sue a seller who has used an unsecured deed for a subsequent defect in ownership. Due to the lack of guarantees, many lawyers will recommend that if you are the buyer, you should avoid this type of act. The problem has become increasingly urgent, according to the TLTA. The courts have become increasingly concerned about the wording of the title deeds and have concluded that they are requests for resignation. Texas courts have tended to find requests for resignation when they discover a language that conveys only the interests of the grantor. The legal trend has led to more vague transfers of title, with claims abandoned in chains of title where the parties did not intend to create uncertainty. Acts of renunciation are not used very often in Texas and are hardly considered an act. See what other types of deeds you can use to transfer property in Texas. Due to the role of title insurance in modern real estate practice, it is always better to use deeds that satisfy title insurance companies. .