Texas Real Estate Law: What Buyers, Sellers & Investors Need to Know

Common Texas Real Estate Questions

1: What constitutes real estate?

Real estate, often termed as real property, encompasses land and its attached fixtures. For many, real estate is synonymous with their residence and its encompassing land. Commercial real estate might comprise of factories, machinery, and similar installations. Real estate also extends to natural resources on or beneath the land, such as minerals and gases. Various components of real estate can be sold independently.

2: What's a disclosure statement?

A disclosure statement is a mandated form in some states, where a property seller discloses specific information and potential defects about the property to a potential buyer. Disclosure prerequisites can differ from one state to another.

3: Can you explain what a deed is?

A deed is a formal document used, and often mandated, for the transfer of real estate ownership. It specifies the former and new property owners, delivers a descriptive outline of the property, and bears the signature of the party transferring it. Different types of deeds, like the warranty deed, special warranty deed, and transfer on death deed, convey varied property interests.

4: Post notarization, what's the next step for a deed?

Once a deed is signed and notarized, it should be registered in the designated land records office, typically found in the property's county. Known under varied names such as the County Recorder's Office or the Land Registry Office, this step involves date-stamping the original deed and making a formal record for a nominal charge. Recording a deed offers public notification about ownership shifts and property interests.

5: Are there standard restrictions for property owners?

Property owners must adhere to certain deed restrictions. Federal regulations might set environmental limits, while local by-laws could determine factors ranging from noise thresholds to fence dimensions. Zoning regulations, often determined by local laws, define property usage in designated areas. In Houston, for example, there are no zoning regulations. State regulations commonly oversee property access and boundary demarcations. Private contracts might also influence property utilization, with certain developments imposing specific stipulations like architectural guidelines or parking rules.

6: Could you define joint tenancy?

Joint tenancy refers to a property ownership model where multiple parties jointly own a property. It's common for spouses to opt for joint tenancy, which often involves equal ownership stakes. A notable feature of joint tenancy is the right of survivorship, enabling the property's transfer to surviving co-owners if one passes away.

7: How do mortgages function?

When a financial institution, like a bank, extends a loan for real estate acquisition, a mortgage interest materializes. This means the bank's loan is safeguarded by the property's value. Mortgages are interpreted differently across states, which might influence outcomes if payment lapses occur.

8: What transpires during a mortgage foreclosure?

If homeowners neglect their mortgage commitments, lenders might opt for foreclosure. Depending on regional regulations and mortgage terms, lenders could pursue a statutory foreclosure (bypassing courts) or a judicial foreclosure (involving courts). Foreclosures are strictly governed by Texas State laws, especially concerning notification and payment rectification windows before a foreclosure sale. Facing foreclosure threats? It's advisable to seek legal counsel promptly.

9: Can I assume the Seller's mortgage and keep their interest rate?

The famous lawyer's answer, IT DEPENDS. The majority of lenders and mortgages have clauses that either prevent another party assuming the loan or will at least require Lender approval before allowing the buyer to do so. The reason being is the Lender, most times, would rather issue a new loan at the current (typically higher) interest rate than what is currently locked in. Attempting to assume the loan without Lender approval is not suggested as this will be considered an unauthorized transfer based on particular clauses in the Deed of Trust and the Lender can trigger the Due on Sale Clause, asking for the entire principal amount of the loan due immediately. 

Texas Real Estate Law Overview

Understanding the Role of Real Estate Brokers in Property Transactions

• When aiming to sell a property, an owner may enlist the services of a real estate broker to connect with prospective buyers. This partnership is formalized through a listing agreement, committing the broker to actively seek potential buyers, and in return, the seller agrees to compensate the broker through a commission upon the successful sale of the property.

• Conversely, potential buyers can also engage a real estate broker to identify properties that match their criteria. It's important to note that real estate brokers must adhere to stringent licensing criteria, which are determined by individual states.

• Functioning as an agent, a broker or salesperson owes specific duties and responsibilities to their client, be it a buyer or seller. However, when a property purchase agreement is reached, it's a direct contract between the buyer and seller. In this scenario, the broker remains an external party, typically offering no guarantees concerning the property's condition or value.

Understanding Real Estate Contracts and Property Transfers

• When a buyer and seller agree to a real estate transaction, their contract is steered by foundational principles of contract law. For such transactions, the law typically mandates that the agreement be documented in writing, ensuring transparency and legality.

• For a real estate title to be considered free from potential liabilities, it needs to stand clear of any encumbrances, liens, disputes, or other possible impediments. It's common for a buyer to engage the services of an attorney or a title insurance firm to conduct a thorough title search, ensuring there are no hidden complications.

• This title search delves into the public records of the property's county, creating a chain of title by examining all past recorded deeds. This process also uncovers any potential obstacles like mortgages, unpaid property taxes, governmental claims, prior legal judgments, or easements that might be associated with the property. Opting for title insurance can offer the buyer protection against potential losses arising from title discrepancies.

• For the completion of the property transfer, the seller must provide a deed with an accurate property description. To solidify the change in ownership, many jurisdictions necessitate the deed's official recording, ensuring subsequent potential buyers are aware of the property's history and change of hands.

Understanding Mortgages and Foreclosures

• One of the prevalent methods to finance a real estate purchase is through a loan, backed by a mortgage on the said property. Essentially, a mortgage represents an interest in the property, kept as collateral for a loan. Borrowers are usually expected to repay this loan in periodic installments, comprising both the principal amount and its interest.

• However, if a borrower fails to keep up with these payments, it can trigger a foreclosure. This means the lender may demand the entirety of the outstanding loan to be paid immediately. If the borrower still doesn't settle the mortgage debt post-foreclosure, the property might be sold off to cover any outstanding amount.

• The specifics of the foreclosure process can vary, influenced by state regulations, the mortgage's terms, and any other existing liens on the property. Many jurisdictions offer grace periods, allowing borrowers to make overdue payments and prevent foreclosure. Furthermore, many lenders prefer negotiating a revised payment plan with the borrower to avert the foreclosure process.

Consult with Our Real Estate Attorneys

• Navigating real estate transactions and resolving disputes can be intricate, given the diverse and evolving legal landscape.

• Whether you're in the process of buying or selling property, or find yourself in a real estate disagreement, it's crucial to seek expert advice. Reach out to the seasoned lawyers at AWA Law Firm to safeguard your interests and rights.

Understanding Deeds in Texas Real Estate

In Texas, as in every state, deeds play a pivotal role in real estate transactions. These seemingly modest documents hold the power to transfer property ownership, with a transaction deemed incomplete until the deed is in the buyer's possession. Integral to a deed are the names of both buyer and seller, coupled with an exhaustive legal description of the property.

Essential Elements of Texas Deeds

For a property deed to be valid in Texas, it must:

• Be documented meticulously with Buyer and Selling parties, legal description and clear intent to transfer property.

• Align with Texas-specific mandates for property transfers, which encompass stipulated language, forms, and other requirements.

• Be publicly recorded, ideally in the county where the property is located. This step establishes a public record of the ownership change and preempts potential future disputes.

Predominant Deed Types in Texas

Among the various deed types, general warranty and special warranty deeds are the most commonly employed in Texas.

• General Warranty Deed: This Texas-friendly deed provides comprehensive protection for buyers. Here, the seller assures the buyer of a clear title, free from undisclosed encumbrances. Furthermore, any subsequent claims of defects will see the seller defending the title.

• Special Warranty Deed: Common in Texas, this deed provides coverage against any potential claims or title defects that could emerge specifically from the seller's period of ownership.

Each deed type brings with it specific rights and guarantees for the involved parties. To understand which deed aligns with your transaction in Texas, guidance from AWA Law Firm is invaluable.

Recording Your Deed in Texas

Post-finalization, the deed needs recording, typically at the County Clerk's Office in the county of the property's location. This process is a staple of Texas real estate law.

Though often overseen by brokers or closing agents, ensuring your deed gets recorded is non-negotiable. It publicly acknowledges the new ownership and establishes a transparent chain of title for future tracing.

Engage with Texas Real Estate Professionals

Deeds, with their complexities, especially within the frame of Texas law, warrant meticulous oversight. Please review our Step-by-Step guide on handling deeds in Texas. The adept attorneys at AWA Law Firm, well-versed in Texas real estate nuances, stand ready to ensure the legitimacy of your transaction and your peace of mind.