USA – TEXAS Law and Practice Contributed by: Taylor Cooksey, Philip Kinkaid, Serena Kramer and David Brooks, Cokinos | Young
2.3 Effecting Lawful and Proper Transfer of Title Deeds and Other Transfers of Real Property Transfers of most types of real property, includ - ing fee estates, are effected through the execu - tion and delivery of a deed. When this occurs, the person to whom the property is transferred acquires ownership from the seller, but has no protection against the claims of most third par - ties unless the transfer is recorded (as described below). Real property is not registered in Texas. Instead, transfers of real property are recorded in the offi - cial public records of the county in which the property is located, which are maintained by the County Clerk. Such recordation puts third par - ties on “constructive notice” of the document and its contents. To be recorded in the public records, the docu - ment must be executed and acknowledged before a notary public, or otherwise proved according to law. Texas authorises the remote notarisation and electronic recording of documents. Title Warranties in Deeds The deed will typically include one of the follow - ing types of title warranty. • A general warranty of title is the strongest type of title warranty, and protects the buyer against title defects regardless of who cre - ated them. General warranties are standard in sales of residential real estate. • A special warranty of title is standard in com - mercial real estate transactions, and only pro - tects the buyer against title defects created by the seller or by persons acting through or under the seller.
In most deeds, Texas law also implies a warranty against title defects created by the seller and against encumbrances. Texas also permits quitclaims as well as “deeds without warranty” . Title Insurance Title insurance is commonly used in Texas. Insurable interests include fee and similar inter - ests, leasehold interests and easements, but not mineral interests. Loan policies are also available to insure liens that are secured by property inter - ests, including the priority of such liens. In the vast majority of US states, title insurance is based on standardised forms issued by the American Land Title Association (ALTA). Texas, by contrast, is one of the few “non-ALTA states” , using Texas-specific forms. Texas offers fewer endorsements than ALTA states and Texas title insurance rates are strictly regulated, cannot be negotiated, and apply to all insurers. In most real estate transactions, the seller will pay the base premium for a title insurance policy, and the purchaser will pay for any endorsements to that policy. Surveys Although Texas is a non-ALTA state for title insurance purposes, it is common for surveys of commercial real estate to comply with the ALTA/National Society of Professional Survey - ors (NSPS) survey standards. When an ALTA/ NSPS survey is not required, surveyors typically comply with standards established by the Texas
Society of Professional Surveyors. 2.4 Real Estate Due Diligence
Typical due diligence conducted by buyers will vary depending on whether the property being
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