Deeds and the Texas Recording Statutes

1 VOLUME 13, NUMBER 1, DECEMBER 1998 SOLUTIONS THROUGH RESEARCHA Reprint From1267BY JUDON FAMBROUGHD eeds and the TDeeds and the TDeeds and the TDeeds and the TDeeds and the TexasexasexasexasexasRRRRR ecording Statutesecording Statutesecording Statutesecording Statutesecording StatutesRecording a deed is thecritical, final step in anyreal estate transaction, yetthe process receives little atten-tion because it occurs afterclosing. In Texas , title companieshandle most closings as well asthe responsibility for Recording (orfiling) the deed . Buyers are rarelyaware of when, where or whyrecording occurs. Nevertheless,real estate purchasers and practi-tioners should be familiar withthe basic rules and the protectionafforded by the Texas , it is important to notethat recordation gives publicnotice of deed contents but doesnot validate an otherwise invaliddeed.

2 Texas Statutes and caselaw dictate five requirements fora valid deed . It must: be in writing, be subscribed (signed by thegrantor at the end of thedocument), include the grantee s name, contain the legal descriptionof the property and be delivered to and acceptedby the all Deeds qualify for record-ing. Although a deed may effec-tively transfer title to the buyer,the county clerk may refuse torecord when it fails to satisfy thestatutory a deed to be recorded (orregistered), the grantor s signa-ture must be properly acknowl-edged or witnessed ( Texas Prop-erty Code, Section [b]). Anacknowledgment is a statutoryprocedure whereby personssigning a document declare theiraction before a qualified person,usually a notary public. Thepurpose is to authenticate theinstrument, the identity of thesigners and their qualified to takeacknowledgments (referred to inthis article as notaries ) arelisted in Chapter 121 of theTexas Civil Practices and Rem-edies Code.

3 The list varies,depending on where the deed issigned. If signed in Texas , theacknowledgment must be beforea notary public, district courtclerk, or the judge or clerk of acounty of where the sign-ing occurs, special rules apply tomilitary personnel and theirspouses. Commissioned officersin the armed forces or thearmed forces auxiliary may takeacknowledgments of any armedforces member, auxiliary memberor member s spouse. It is pre-sumed that the military officer iscommissioned at the time ofacknowledgment and that theperson signing is in the serviceor married to someone in public policy reasons,having a financial or beneficialinterest in a transaction dis-qualifies notaries from takingacknowledgments. If theyproceed to do so and the dis-qualification is apparent on theface of the deed , the recordeddeed is deed signed and acknowl-edged by the grantor in thepresence of two or more cred-ible, subscribing witnessesqualifies for Recording , eventhough it is not , one of the witnessesmust later appear before anotary to acknowledge andswear that the witness: saw the grantor sign orpersonally acknowledge thesignature and signed at the grantor notary must then certifythe acknowledgment by signingor affixing an official seal.

4 Thiscertification is necessary tovalidate the acknowledgment sothat the deed or other docu-ment can be accepted , notaries mustkeep a record of eachacknowledgment in abound book. The record mustinclude the dates of the acknowl-edgments and instruments, thesigners names and signers addresses. If the notary does notknow the signers personally,then the record must include thename and residence of the personwho introduced them. If theinstrument involves a conveyance"Filing a deed in thewrong county has thesame effect as nothaving filed at all."of land, the record must reflectthe grantee s name and thecounty where the land is a deed is acknowledged,it should be filed in the countywhere the land is located. If thetract extends into more than onecounty, the deedmay be recorded inany county wherepart of the propertyis located (TexasProperty Code, Sec-tion [a]).

5 Toavoid problems, how-ever, the deed shouldbe recorded in everycounty where thetract a deed in thewrong county hasthe same effect as nothaving filed at all. Tocorrect the error, thegrantee-ownershould submit either the originaldeed or a certified copy of it forrecordation in the proper will be protected only afterthe date of Recording in thecorrect county ( Texas PropertyCode, Section ).On the other hand, if a docu-ment is filed in the propercounty and the land is laterincorporated into a new county,the original filing remainseffective. The county court inthe new county must obtain atranscript of all the land affectedand deposit the records with thecounty clerk in the new county( Texas Property Code, [b]). Texas law requires documentspresented for recordation to bein English unless signed before1897, in which case a translationmust accompany the document( Texas Property Code, [a] and [b]).

6 An acknowledg-ment taken outside the UnitedStates may be in a foreign lan-guage as long as an Englishtranslation is attached and certainother criteria are met (TexasProperty Code, Section [c]).The proper place for filing adeed is the county clerk s a deed is submitted forrecordation, the clerk charges a$3 fee for the first page and $2for each succeeding page (TexasLocal Government Code, ). A document signedafter 1981 must include thegrantee s mailing , the clerk assesses apenalty of $25 or twice theamount of the normal recordingfee, whichever is greater (TexasProperty Code, Section ).Upon payment of therecording fee, the countyclerk records and indexesthe deed . But what happens whenthe county clerk indexes a deedincorrectly? Is the clerk personallyliable? Does any responsibility fallon the person who submitted thedocument for recordation?

7 Texas law provides that theclerk may be liable for a civilpenalty not to exceed $500 for,among other things, not provid-ing and maintaining the indicesrequired by law ( Texas PropertyCode, Section [b]). Courtshave held that the person filinga document with the countyclerk and paying the recordingfees is not responsible for theclerk s errors (David v. Roe, 196 [1925]).County clerks in Texas use aname index to find recordeddocuments. The grantor-granteeindex (or direct index) lists allthe grantors last names inalphabetical order. The grantor sname appears next to thegrantee s name. The grantee-grantor index (or indirect index)alphabetically listsall the grantees lastnames, with therespective grantors names next indices grouptransactions accord-ing to recordingdates. One set ofbooks, for example,may index alldocuments recordedfrom 1967-86 andanother from 1987-97.

8 Modern indicesare generated bycomputer; whereasolder indices may be handwrittenand difficult to read. The olderindices often group namesstarting with a certain letter butdo not alphabetize them beyondthe first do not contain theactual recorded , they reference wherethe documents may be found usually by volume and pagenumber in a separate set ofbooks. However, some countiesput all the documents on micro-film, while others have a com-puter program containing boththe indices and document copiesfrom the most recent indices provide a meansfor researching title to realproperty. The grantor-granteeindex traces the chain-of-titleforward in time, and thegrantee-grantor index traces itbackward. For example, if youknow the current owners andwant to trace their title back intime to find who sold them thetract, you would look for thecurrent owners names in thegrantee-grantor index.

9 Knowingeither the grantor s or grantee sname keys those interestedinto the and title compa-nies typically do not goto the county clerk soffice to review recorded docu-ments. Instead, they get copiesof the county records and createtheir own title resources using a tract index. This index isfaster and easier. It allows theexaminer to research the title bylegal description of the landrather than by grantors andgrantees Recording a deedoffers important safeguards to abuyer, it need not be recorded tobe binding on the parties to thetransaction and to their the other hand, a deed mustbe recorded to be effectiveagainst a creditor or a subse-quent purchaser for valuableconsideration without notice( Texas Property Code, [a] and [b]).This type of purchaser onewho pays valuable consider-ation and takes title withoutnotice of a third party s claim is called a bona fide or inno-cent purchaser.

10 Bona fidepurchasers enjoy preferred statusunder Texas law, and the courtsgo to great lengths to protecttheir ownership. Accordingly, abona fide purchaser s title issuperior to title held by anyearlier purchaser holding anunrecorded deed ( Texas PropertyCode, Section [a]).To be protected by the Texasrecording Statutes , a buyer mustbe a bona fide purchaser at thetime of closing. This means thatthe buyer: paid valuable considerationfor the property, had no actual knowledge ofan earlier unrecorded deedto the property and had no constructive noticeof a third party s interest inthe case law has clarifiedthese requirements. Valuableconsideration means the buyerpaid a substantial amount forthe property. Although theamount may be less than fairmarket value, it cannot bemerely nominal or grosslyinadequate. The recipient of agift deed , where no consider-ation changes hands, cannot beclassified as a bona fide pur-chaser.