2024 Quitclaim Update

Effective September 1, 2021, Section 13.006 of the Texas Property Code alters the effects of a quitclaim deed in Texas. Specifically, Section 13.006 states, After the fourth anniversary of the date a quitclaim deed for real property is recorded in the deed records of the county in which the real property is located, the quitclaim deed:

(1) does not affect the question of the good faith of a subsequent purchaser or creditor; and

(2) is not notice to a subsequent purchaser or creditor of any unrecorded conveyance of, transfer of, or encumbrance on the real property.

Prior to September 1, 2021, the law in Texas was such that a quitclaim deed could not form the basis for a bona-fide purchaser defense against unrecorded claims. For this and other reasons, a Texas quitclaim deed is the not recommended method of conveying real property. Typical uses of quitclaim deeds in Texas related to the conveyance of real property to a purchaser for value or a party claiming ownership against another similar claimant without placing any warranty liability on the grantor where it is not certain that the grantor holds all or any part of title to the land being conveyed. Quitclaim deeds only convey what rights, if any, that the grantor holds in the land being conveyed and no more. Quitclaim deeds still do not convey after-acquired title. They can form an estoppel against the grantor to subsequent purchasers for value without actual, constructive or inquiry notice of a title defect.

However, as of September 1, 2021, a quitclaim deed filed for record in the county in which the land is located can now form the basis for a subsequent purchaser for value who doesn’t have actual, constructive or inquiry notice of a title defect as long as the instrument has been recorded for at least four years. The practical effect of Section 13.006 provides a modicum of stability to title insurers in Texas where quitclaim deeds may be in the chain of title. It should be noted that Section 13.006 only applies to quitclaim deeds recorded on or after September 1, 2021, and not those recorded before. Therefore, it appears that Section 13.006 is applicable to a quitclaim executed prior to September 1, 2021, so long as it is recorded after that date.

Finally, while Section 13.006 will provide some needed clarity and comfort for title insurers in Texas, it is still the better practice to use a general warranty deed, a special warranty deed or a deed without warranty, rather than a quitclaim deed, for conveying real property in Texas.

Scott Alagood is Board Certified by the Texas Board of Legal Specialization in both Commercial and Residential Real Estate Law and may be reached at [email protected] and www.dentonlaw.com