Legal Question in Real Estate Law in Texas

My wife and I built a house in Texas in 2003 for my father-in-law to live in after his house was purchased by the city and demolished for completion of a stormwater control project. My father-in-law gave us some money towards the down payment on the house. My father-in-law was included on the property deed along with my wife and myself. My wife and I made all mortgage and property tax payments on the property and never charged my father-in-law any rent. My father-in-law paid his utilities and living expenses. After we paid off the mortgage, my father-in-law requested he be removed from the deed to protect our investment in case anything happened to him. He completed a Quit Claim Deed in 2011 and submitted it to the county clerk for recording with the deed in the county where the property is located. My father-in-law passed away in March 2016. My wife and I decided to sell the house he lived in and put the house up for sale. After listing the house for sale we were informed by the title company used by our realtor that the Quit Claim Deed was invalid in Texas and therefore the house would become part of my father-in-laws estate and we would not be able to sell the house until his will was probated. My father-in-law updated his will in 2011 after he submitted the Quit Claim Deed. He did not include any disposition instructions about the house in his will because, according to his handwritten notes included with his will information submitted to the attorney that prepared the will, he believed he did not have any ownership interest in the house. My father-in-law appointed me as the executor for his estate in his will. The title company has stated they will accept my signature as executor at the time of closing in place of my father-in-law's but they will have to transfer his share of the proceeds from the sale of the house to the estate to be divided between all the named heirs unless those heirs relinquish their right to the property. There are 2 other named heirs in the will. Since instructions for the division of the house were not specifically included in the will, I have been told my father-in-law's share of the property will be divided equally among the three heirs. I have been told the title company will not accept the Quit Claim Deed as a valid transfer document and the probate court will not accept the Quit Claim Deed as evidence of my father-in-laws intentions in respect to the property. If Quit Claim Deeds are not accepted in Texas by title companies why are they accepted by the county clerk to record with the deed and to change the deeded name for property taxes.

Asked on 6/02/16, 12:53 pm

1 Answer from Attorneys

Joseph A. McDermott, III Attorney at Law

The short answer to your question is that the county clerk is only a maintainer of records; he does not pass on the validity of documents submitted for recording. Title companies' default position is to refuse to take any risk.

Quitclaim deeds can be valid in Texas and I cannot think of any reason why a properly prepared deed would not pass title from your father-in-law. Was he married during any of this time? I cannot tell if this particular deed was proper without reviewing it. Did a lawyer prepare the quitclaim deed? How much are you selling the house for?

Won't the other two heirs disclaim any interest in the house sale proceeds? Possibly, you and your wife could make a claim on the estate for the value of the interest payments you made, though you'd likely have to resign as executor first

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Answered on 6/03/16, 9:54 am

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