USA - TEXAS Law and Practice Contributed by: Brad Holdbrook, Mary Mendoza, Michael Coleman and James Barnett, Haynes and Boone, LLP
2. Sale and Purchase 2.1 Categories of Property Rights In Texas, various categories of property rights can be acquired, including the following. • Fee Simple Absolute – this is the highest form of ownership interest and grants the owner complete control and rights over the property for an indefinite period. • Life Estate – in this type of ownership, the owner holds rights to the property only for the duration of their life or the life of another person. • Leasehold Estate – this involves possess - ing the property for a specific period under a lease agreement. The rights are limited to the terms outlined in the lease. • Mineral Rights – these rights pertain to the ownership of minerals or resources beneath the surface of the property. • Easements – these are rights to use or access someone else’s property for specific purpos - es, such as utilities, access, or drainage. • Licences – similar to easements, licences grant permission to use another person’s property for a specific purpose, but they are revocable at any time. • Air Rights – these rights allow the owner to use the space above the property, often for construction or airspace leasing. 2.2 Laws Applicable to Transfer of Title In Texas, the transfer of real estate title is gov - erned primarily by state laws, which include the Texas Property Code. These laws cover a broad range of real estate transactions, including the sale and purchase of residential, industrial, office, retail, and hotel properties. While the gen - eral legal framework for transferring title applies to all types of real estate, there may be specific considerations or additional regulations for cer -
tain types of properties, such as zoning laws for commercial properties or residential housing standards. Formatting requirements for real estate docu - ments to be recorded in the real property records, the documents required for transfers, and enforcement of statewide rules can also vary on a county-by-county basis in Texas. Spe - cial laws or ordinances at the local level may also impact the transfer of certain types of real estate, addressing issues like land use, building codes, and environmental assessments. 2.3 Effecting Lawful and Proper Transfer of Title In Texas, a lawful and proper transfer of title to real estate is effectuated through the execution of a deed, which must be delivered and accept - ed. Deeds are recorded in the county real prop - erty records in which the property is located to provide public notice and protect the interests of both parties. Title insurance is common in Texas to protect against defects in the title. During the COVID-19 pandemic, Texas implemented new procedures, including remote notarisation and electronic recording of documents, to accom - modate restrictions on in-person transactions, and many of these processes remain in use. 2.4 Real Estate Due Diligence Commercial real estate due diligence for Texas properties typically involves a comprehensive evaluation of the property, including its legal, financial, and physical aspects. This process usually includes title search and title insur - ance to verify ownership and check for liens or encumbrances, property and environmental inspections to assess the condition and identify potential issues, review of local zoning and land use regulations to ensure compliance and under - stand permissible uses, and financial analysis of
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