How do I Transfer Real Property to LLC that has a Mortgage in Texas?
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Deeds are used to transfer real property and come in various forms. A deed is the written document which transfers title (ownership) or an interest in real property to another person. No consideration is required to make the deed effective. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee) and be signed and notarized by the grantor. In addition to the signature of the grantor(s), deeds must be acknowledged to be recorded and acceptable as evidence of ownership without other proof. A valid deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the county recorder or recorder of deeds in the county in which the real estate is located.
If there is a mortgage on the property, a transfer may violate a due-on-sale clause in the mortgage which the lender may or may not seek to enforce. Most lenders require that the mortgage or deed of trust contain a due on sale clause. This is an acceleration clause in a loan, calling for payment of the entire principal balance in full, triggered by the transfer or sale of a property. Such a clause permits a secured mortgage lender (federal, state or private) to call the entire unpaid loan balance due and payable immediately if the property securing the loan is sold, transferred, traded, gifted or otherwise disposed of without the lender’s prior written consent.
There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A warranty deed conveys specifically described rights which together comprise good title. The grantor warrants that the title is good, that the transfer is proper, and that there are no liens other than stated in the deed. A general warranty deed not only conveys to the grantee all of the grantor's interest in and title to the property but also guarantees that if the title is defective or has a "cloud" on it, such as a mortgage claim, tax lien, title claim, judgment, or mechanic's lien, the grantee may hold the grantor liable. A warranty deed may also specify that is is subject to a vendor's lien, such as a mortgage, and such deedds are typically referred to as a special warranty deed.
The grantee can sue if the warranty is breached. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title. If a deed is intended to be a general warranty deed, it should contain a phase specified by state law such as the phrase "conveys and warrants". These words, called operative words of conveyance, carry with them several warranties which the grantor is making to the grantee. An example of operative words of conveyance in a quitclaim deed is "convey and quit claim."
The consideration required to be stated in a deed may be anything of value, and may be stated as a nominal amount. A gift deed is a deed in which the consideration is not monetary, but is made in return for love and affection. It is a document which transfers property to another as a gift. It is used when nothing of monetary value is recieved in return. For example, when someone assume to make payments on behalf of another in return for a deed, the payments made on their behalf may be considered monetary consideration. Transfer of a gift deed can be reported as a gift for federal tax purposes.
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