Warranty Deed Vs Special Warranty Deed (Texas)

[Charlcie]

I purchased a residence in July and note that what I have, along with the Deed of Trust, is a Special Warranty Deed as opposed to a General Warranty Deed. I realize I should have done my homework and do accept responsibility for my willingness to assume the attorney who drew up the documents would have integrity (I have since learned otherwise), but I'm not sure how much my real estate purchase is at risk.

I'm meeting with the Seller and this attorney tomorrow as I will be filing a Correction Deed removing my daughter's name from the deed with only mine remaining. (Another issue entirely.) Would it be appropriate or possible to take this opportunity to have the Special Warranty Deed replaced with a General Grant Deed?

My fear is that the Seller (who claimed to have paid his mortgage in full, though I have learned this is not the case) could at some future date, default on his loan agreement, which in turn could possibly cause me to lose the house despite the fact that I would have made all MY payments on time.

I see that I'd be in a much better position had I gone through a Title Company, but is there anything I can do to protect my investment?

Charlcie

 

[justalayman]

do you have owners title insurance? Are the exception in the insurance acceptable to you? If so, a general warranty deed wouldn't provide you with any true additional coverage

as well, for you to make a claim on a warranty deed, you would have to sue the seller. You would result with, at best, a judgement against them. You then would have collect on that judgment. Is that a reality?

My fear is that the Seller (who claimed to have paid his mortgage in full, though I have learned this is not the case) could at some future date, default on his loan agreement, which in turn could possibly cause me to lose the house despite the fact that I would have made all MY payments on time.

that would be covered under the special warranty deed. The special warranty simply means the seller warrants the title to be clear only due to his actions. A mortgage and subsequent failure to pay which resulted in a claim against your property would be the sellers actions causing an encumbrance. covered.

but, you can always ask but there is nothing you can do to force the issue of them issuing a general warranty deed.

You have piqued my interest with this though:

I'm meeting with the Seller and this attorney tomorrow as I will be filing a Correction Deed removing my daughter's name from the deed with only mine remaining.

Is your daughter in agreement with this action?

 

[FlyingRon]

Regardless of the form of deed you're in for a world of hurt if he doesn't make payments. If he can't make the payments, there's probably no assets to recover to make good on the warranty either.

Wrap mortgages are frequently disasters for this reason. As justa points out, I wouldn't accept property from my sainted aunt without owner's title insurance.

 

[justalayman]

actually, the fact there is still a mortgage against this property, the seller couldn't use either warranty deed as he does not have a clear title to the property.

This would give you cause to rescind the sale.

In fact, since most mortgages include a due on sale clause, his mortgage is likely due in full currently.

Sounds like you have a really screwed up deal. I would find thee a lawyer before taking another step.

 

[Charlcie]

RE:Special Warranty Deed Vs General Warranty Deed: Removing daughter's name from deed

My daughter is OK with me removing her name. I wanted her name on the deed because my sisters and I went through a 3+ year legal battle because "others" were challenging my mother's wishes as to the transfer of her home. I didn't want that to happen to my daughter, so put her name on the deed. However, when I went to apply for the homeowners' exemption the County Assessment District said I would only be eligible for half. I had my daughter's and my names listed as: myname OR hername as opposed to myname AND hername, but they told me it didn't make any difference, since I was the only one living there.

Charlcie

 

[FlyingRon]

Houses aren't cars. You can't title them with OR. Further it's not some club membership, she acquired half the property. You can't just "correct" her off by some agreement with the seller. She'd need to deed it to you. You'd be well advised to stop screwing around with such a large asset and get a lawyer to do things properly.

 

[justalayman]

you have one screwed up deal. What you are doing is not a correction. Daughter needs to transfer her interest to you via deed.

 

[Charlcie]

Correction Deed

I'm filing the Correction Deed on the advise of our county Assessment District. I had applied for the Homeowner's exemption and was informed I could only qualify for half as long as my daughter's name was on the deed. They advised me after conferring with their attorney that this is what I should do.

It sounds like attorney advise should be taken very cautiously as the advise I'm getting seems to vary with each source.

 

[Charlcie]

Houses aren't cars. You can't title them with OR.

Real Estate Laws must have changed a WHOLE lot or perhaps this is a state-by-state real estate law issue. In CA (where I lived previously) you most assuredly could title a real estate property with 'OR'. The 'OR' simply means either party can act independent of the other, where a title with 'AND' in relation to the two parties means both parties must be party to any future sale, equity loan, refinance, etc. and cannot act independent of each other in regard to the real property.

Further it's not some club membership, she acquired half the property. You can't just "correct" her off by some agreement with the seller. She'd need to deed it to you."

Actually I do agree with you here. It seems that having my daughter sign a Quit Claim is in order to have her name removed despite the advise I received from the Appraisal District.

 

[justalayman]

the deed that is currently controlling has been recorded with the county, right? Well, that doesn't just disappear. The correction would also be recorded and since daughter has not relinquished her interest, she still could make a legal claim to the property. That makes a cloud on the title.

you need to speak with an lawyer versed in real estate matters. You are working on screwing up the succession of title for all future owners.