5 Types of Deeds in Texas (and When to Use Them)

Need to transfer ownership of physical property in the Houston, TX area?

Buying and selling real property is a complex process. There are all sorts of legal documents that need to be filed and hoops that need to be jumped through in order for the real estate transaction to be valid and legally binding.

One of those legal documents you need is a deed, and real estate deeds are often confused with the “title” of a property. In actuality, a deed is simply a physical legal document that transfers the title of a property – which is the concept of ownership and rights to the property – from the current owner (or the “grantor”) to the new one.

There are several types of deeds in Texas and we’ll walk you through their definitions and benefits, but it’s crucial to speak with a Houston real estate lawyer about your unique situation before deciding on which deed to use for your property transfer.

#1 General Warranty Deed

The simplest explanation of a general warranty deed is that it offers the most legal protection for the grantee when transferring ownership. That’s because, in this type of deed, the grantor is warranting (or guaranteeing) that they have a legal and equitable title and that there are no other claims to the property out there.

When general warranty deeds are used, if there happen to be title defects realized in the future—such as other legal claims to ownership or liens against the property—the grantor would be responsible for rectifying them.

When Are General Warranty Deeds Used?

A general warranty deed is actually the most commonly used in property ownership transfers in Texas. It’s the type of deed that’s preferred by homebuyers in standard home sales since it prevents the new owner from having to purchase title insurance through a title company.

#2 Special Warranty Deed

While a general warranty deed protects the buyer against all possible title defects, a special warranty deed offers a bit less protection for the grantee. 

With this type of Texas deed (also known as a limited warranty deed—the grantor only guarantees that no title issues exist for the time period that they owned the property. They would not be liable for any defects that occurred prior to them taking ownership.

When Are Special Warranty Deeds Used?

In cases where the current owner isn’t comfortable with a general warranty, a special warranty deed can be used. However, buyers using these types of deeds in Texas should purchase title insurance through one of the many title companies in the state.

#3 Quitclaim Deed

The type of deed with the least protection for the grantee is undoubtedly the quitclaim deed. Quitclaim deeds make no guarantees at all regarding existing ownership claims or title defects, and simply allow the grantor’s interest in the property—whatever that may be—to the grantee. Those purchasing a home generally shouldn’t use a quitclaim deed.

When Are Quitclaim Deeds Used?

There are situations where quitclaim deeds are beneficial. 

They’re easy to use and file, so they’re often used in situations like:

• Gifting property without money exchanging hands
• Correcting errors on a type of warranty deed
• Simple additions or removals of names from titles

If you’re considering a quitclaim deed, be sure to review your situation with an experienced Houston real estate attorney to ensure you’re protected. Real estate attorneys can examine the current title insurance owner’s policy and even perform a thorough title search to clear any defects that may become issues in the future

#4 Transfer on Death Deed

Transfer on death assets or properties—including transfer on death deeds—are often used during the estate planning process, and have the same goal in mind: To transfer property or assets to the heir when the grantor dies and avoid having to go through probate.

Is it Wise to Use a Transfer on Death Deed in Texas?

Transfer on Death deeds became legal in the Lonestar State in 2015, and there are some drawbacks to this type of deed in Texas law. For example, when the grantor passes away, creditors of the estate have two years to make claims against the property, possibly pulling it back into the probate process.

For those two years, the new property owner won’t be able to purchase title insurance through a title company, which affects their ability to sell the property.

#5 Deed of Trust

According to the Texas property code regarding property deeds, if a mortgage loan is used during the home-buying process, a deed of trust will be needed to protect the lender. 

Basically, there are three parties involved in using a deed of trust to transfer real estate:

• The lender
• The trustor (the new homeowner who’s borrowing)
• The trustee

What Are the Trustee’s Responsibilities in Texas Deeds?

Typically, the trustee in a deed of trust is a title company or some other company fit to fulfill trustee duties. The trustee is responsible for collecting mortgage payments on behalf of the lender and has the ability to begin the foreclosure process should the borrower default on mortgage payments.

Transferring Real Property? Contact a Houston Real Estate Lawyer

Feeling overwhelmed after reading about all the different types of Texas property deeds? Don’t worry. The process is complicated, but there’s help. If you need help navigating the legal waters of your property deed options, contact a Houston real estate lawyer at The Titus Law Firm today.