Property Deed Basics

A deed is a legal document that transfers ownership of real property. Real property is land, or anything attached to land, such as buildings.

Deeds typically refer to two parties—the grantor and grantee. The grantor is the current owner who is transferring the property to someone else. In other words, the grantor is the seller or giver of the property.

The grantee is the person who receives the property. In other words, the grantee is the buyer or gift recipient.

In addition to transferring ownership, real estate deeds contain important information about the property. This includes:

• The new owner (grantee)
• The previous owner (grantor)
• The land’s location and boundaries (property description)
• Encumbrances, if any (limitations on how the land may be used)

A chain of well-written deeds will allow you to track the property all the way back to the original owner. This helps ensure that there will not be any unexpected claims on the property. 

In real estate, the terms "title" and "deed" can be confusing. Title is the property right. The deed conveys that right.

Real estate title is not a document. Rather, it is the strength of one's ownership claim. An unassailable ownership claim, or "clear title," relies on a clear chain of grantors and grantees that one can track from the original owner to the current deedholder. Having a clear title means that there will be no unexpected, valid claims on the property against the deedholder.

A deed is the document that transfers the grantor's ownership to a new person, the grantee. If title is based on a clear chain of ownership, deeds are the links of that chain.

In Texas, you record your deed with the County Clerk in the county where the property exists. If the property is in more than one county, record it in each.

It is important to record your deed. In Texas, the property is legally transferred when the grantee accepts the signed deed. However, recording the deed lets everyone know who owns the property. This helps prevent someone else from claiming they own it. Recording every deed also clarifies the chain of ownership, which helps assure future buyers that you have the right to sell the property. It can be difficult to sell property if you cannot show clear title.

To be legal, a deed must be in writing, signed, delivered, and accepted.

In Writing 

A deed must be in writing. You cannot use an oral agreement to transfer real estate.  

Signed 

The grantor must sign the deed in front of a notary or two credible witnesses. A grantor can only transfer their own rights to property. That means if more than one person owns the property, each owner must sign. If only one owner signs, the grantee becomes co-owner with anyone else who still has rights to the property.  

A deed does not require the grantee's signature.  

Delivered and Accepted

A deed is effective when the grantor gives it to the grantee and the grantee accepts it. Some types of statutory deeds, such as transfer on death deeds, may not require this step.

A deed can, and probably should, include more than the legal minimum. A well-written deed might include:

Land Description  

A deed should fully describe the property. This is more than a mere address. The description should clearly lay out the property’s boundaries.

This description can be in the deed itself. The deed can also reference a description found elsewhere, so long as it is in writing and exists when the deed is drafted. For example, a deed could reference a public survey, property tax documents, or even the most recent deed to the property. 

Example property description:

Lot 25, Block 10, of Oak Creek Subdivision #8, as per a plat recorded in Plat Book 40, Page 8, of the Public Records of Crowder County, Texas.

Identity of the Parties

The grantor or their agent must sign the deed. The grantee does not have to sign. However, it is important to identify the grantee, by name or some other means, so that ownership is clear.

Consideration

“Consideration” is something valuable given in exchange for something else. In other words, consideration is the purchase price. Consideration does not have to be money--it can be in-kind work, debt forgiveness, release of a legal claim, etc.

A consideration clause does not have to go into detail or even list the entire purchase price. In Texas, deeds often include language similar to “in exchange for $10.00 and other valuable consideration,” even though real estate usually sells for far more than $10.00.

While transferring property does not require consideration, consideration can help strengthen a grantee’s claim as a good faith purchaser. Consideration is also necessary for any contract. While a deed is not a contract, it may be subject to one.

Grantee Address

While a valid deed does not require the grantee address, you do have to include a mailing address for each grantee when you record the deed with the County Clerk. You can include the addresses in an attachment if needed – it does not have to appear within the deed itself. You can also pay a penalty fee if you choose to file without any mailing addresses.

Recital

The recital is an optional opening statement that might include a description of the parties, the reasons for creating the deed, or other facts relevant to the deed.

Habendum 

A habendum describes the rights being granted. This can be especially important for deeds that only grant partial rights. For example, a mineral deed might give only a percentage of the total mineral rights to the grantee.

Permitted Encumbrances

An encumbrance is a limit on land use, such as a lien, easement, or restrictive covenant. These are common and are often listed as "permitted" under the deed's warranty. Doing so means the grantor will not be liable for the encumbrance when granting a warranty deed.

There are several types of deeds that offer different levels of protection for the buyer. 

General Warranty Deed 

A general warranty deed offers the most protection for the grantee. In a general warranty deed, the grantor guarantees that there are no encumbrances, such as liens or other rightful claims to the property. If it turns out that there are such encumbrances, then the grantor is responsible.

Note that land often has easements or other restrictions on use. These can be included as “permitted encumbrances” if the grantor does not want to be liable for them. An attorney can help you include the right language.

Special Warranty Deed 

A special warranty deed guarantees some protection for the buyer but not as much as a general warranty deed. A special warranty deed only guarantees that no new problems or encumbrances arose while the grantor owned the property. The seller doesn’t make any promises about the condition of the title before they owned the property.

Deed without Warranties

A deed without warranties only transfers title to the property, with no protections for the grantee. It makes no promises and offers no legal recourse if there is a problem. It allows the grantor to give up all ownership, with no responsibility toward the property or the grantee in the future.

In some cases, a deed without warranties may be better than a quitclaim deed because a quitclaim deed, as a matter of law, gives notice to the grantee that there might be other claims on the property. That makes it harder to protect against those claims, should they arise. In other words, a quitclaim deed weakens title, whereas a deed without warranties transfers the title as-is. (Texas passed a statute that gives limited protections for quitclaim transfers, but those protections do not begin until at least four years after the sale.)

Quitclaim Deed 

A quitclaim deed gives the grantee all of the grantor’s rights, whatever those may be. Often it may not even be clear if the grantor has any rights to give, but it prevents the grantor from making any claims on the property in the future. Like a deed without warranties, a quitclaim allows someone to just walk away from all rights--or potential rights--to a property.

A quitclaim deed is simple to use but gives the grantee the least amount of protection. Texas courts have said a quitclaim deed, by definition, puts the grantee on notice that there may be other claims on the property – even if those claims are based on unrecorded deeds that are not on public record. In the past, this could make it impossible for the grantee, as well as any future buyer, to ever have clear title or claim protection as a good faith purchaser. Texas passed a law in 2021 to help fix this problem. Now, a grantee becomes a good faith purchaser four years after recording a quitclaim deed.

A good faith purchaser, also called a bona fide purchaser, is someone who buys the property for value and without notice that someone else might have a claim on the property. Notice can be actual or constructive.

Actual notice is when the buyer knows that someone else may have a claim on the property. Constructive notice is when the buyer should know that someone else may have a claim on the property. For example, if there is a deed on record with county clerk, the buyer has constructive notice of that deed whether or not they checked the county records.

A good faith purchaser is protected against another person’s claim on the property.

Example:

Gary is an unscrupulous property owner. Gary sells property to Jane, who never records the deed. Jane legally owns the property. But then Gary sells the same property to Bob, even though Gary no longer has a right to do so. Jane then sues Bob, saying that the property belongs to her because she bought it first.

Unfortunately for Jane, Bob did not know about Jane’s purchase and Jane’s deed is not in the public record. That means Bob had no actual or constructive notice of Jane’s claim on the property when he bought it. Bob gets to keep the property because he is a good faith purchaser. Jane may sue Gary for damages, but she cannot take the property from Bob.

An easement exists when someone who is not an owner has the legal right to use property in a limited way. For example, a utility company may have an easement to place electric lines. Easements can be negotiated, obtained through condemnation, or arise after a long-term pattern of use.

A warranty deed should list any easements. Otherwise, the grantor may have to compensate the grantee.

A restrictive covenant is a rule that all of the local landowners must follow. For example, everyone in a neighborhood might have to keep their lawns trimmed to a certain height. Or they might be prohibited from painting their house certain colors. 

Developers often include restrictive covenants when they sell parcels in a new development. It usually falls on the homeowner association to enforce such covenants.

A warranty deed should mention any restrictive covenants, else the grantor may be liable.

A lien is a property right based on a debt. For example, if you put up land a security on a loan, the lender will have a lien on your home until you pay back the loan.

Liens must be addressed when selling property.

Many types of special purpose deeds exist to meet different legal needs. These deeds may fall into the general, special warranty, no warranty, or quitclaim deed categories. All deeds must meet the basic legal requirements for a deed unless a statute makes an exception.

Transfer on Death Deed

Transfer on death deeds are special deeds that only take effect upon the grantor’s death. They are used to give land to an heir without using a will. This means the land does not have to go through probate for the grantee to take ownership. Unlike most deeds, the law says that the grantor does not have to deliver the deed to the grantee to make it valid. Also, it is revocable so long as the grantor is alive.

Ladybird Deed

A ladybird deed is similar to a transfer on death deed in that it takes effect when the grantor dies. Like a transfer on death deed, it can help avoid probate. There are some differences, though. For example, a power of attorney can be used to execute a ladybird deed, but not a transfer on death deed. When trying to decide whether to use a ladybird deed or a transfer on death deed, it is best to consult an estate planner or attorney.

Correction Deed

A correction deed is used to correct errors in a deed, such as misspellings.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure is used when a borrower fails to make mortgage payments and gives the property to the lender instead of going through the formal foreclosure process. This cancels the debt and helps make sure that they won’t owe anything should the property sell for less than the amount remaining on the loan. It can also help the borrower protect their credit.

Note that in Texas, “deed in lieu of foreclosure” describes the process of giving over a deed in exchange for debt forgiveness. It is not necessarily the actual title of the deed document. This is a technicality, but worth mentioning to avoid confusion.

Gift Deed

A gift deed transfers property as a gift instead of a sale. It does not include consideration, and so one can argue that it does not protect the grantee as a good faith purchaser--though that should not matter if title is clear.

Joint Tenancy with Right of Survivorship Deed

When co-owners have a joint tenancy with right of survivorship deed, each owner’s rights will pass to the other owners upon death. (Normally, their rights would go to their children or other heirs.)

Note that there are different rules for married and unmarried co-owners, as married couples already have certain survivorship rights.

Partition Deed

A partition deed breaks up jointly owned property and assigns a portion, or "partition," to each co-owner.

Deed with Life Estate Reserved

A deed with life estate reserved allows the grantor to keep using the property as long as they are alive.

Mineral Deed

A mineral deed gives the rights to mine and sell minerals, such as gas and oil, that are found on land. Rights to minerals found on land are often separate from general use ownership, or “surface rights.” It is possible for one person to own the land surface, while someone else owns the mineral rights.

Deed of Trust

A deed of trust is a deed given to a third party, the "trustee," to hold until certain conditions are fulfilled. It is often used to put up property as security for a loan, resembling a mortgage. For example, someone takes out a loan to buy property. The trustee (someone other than the buyer and the lender) gets the deed and technically owns the property while the loan exists. The trustee cannot sell the property unless the borrower defaults on the loan. The trustee transfers the property to the buyer when the borrower repays the loan.

Deed of Trust to Secure Assumption

A deed of trust to secure assumption is used to grant property rights when there is an existing mortgage or similar home finance loan. It requires the grantee to make house payments while giving the grantor, who is not the lender, the right to enforce those payments. It does not remove the mortgage or lessen the lender’s claim.

For example, this type of deed may be used if a divorcing couple needs to divide real estate when both of their names are on the mortgage. The deed lets one spouse use the home and makes that spouse responsible for mortgage payments. If they fail to make payments, the spouse who is not using the home can foreclose. See Divorce and Real Estate for more on this topic.

Rights to natural water, such as a river running through a property, is separate from land ownership. Water rights, also called riparian rights, are complicated and heavily regulated. If you have concerns over water on your property, consult an attorney.

A divorce decree may say which spouse should get the property, but the decree does not actually transfer the property. The parties still need to create a deed. The deed should include terms to make sure that the transfer honors the conditions in the divorce decree. For example, a deed of trust to secure assumption may be used to help divide marital real estate when there is a mortgage. See Divorce and Real Estate to learn more.

Transferring real estate can be complicated, with lots of room for error. It is always a good idea to get a lawyer to help you prepare a deed. Incorrectly preparing a deed can create liability for the grantor and harm the grantee’s rights.