Mistakes happen, even in real property transactions, where the details can be complex and easily overlooked by the parties involved.
Fortunately, under Texas law, the correction deed offers a simple and cost-effective alternative to judicial remedies – like reformation or recission of the erroneous deed – for correcting mutual mistakes in recorded real property conveyances. In certain cases, filing a correction affidavit may provide an even more efficient solution than executing a correction deed.
Statutory Authority
Correction deeds are governed by Sections 5.027 through 5.031 of the Texas Property Code, which authorize the correction of both minor, nonmaterial errors and substantial, material mistakes in recorded instruments. However, practitioners should be aware that the blackletter law set down in the Property Code is not identical to the due-diligence requirements of the Texas Title Examination Standards, the guidelines for assessing the marketability of land titles issued by the Real Estate, Probate and Trust Law and the Oil, Gas and Energy Resources Law Sections of the State Bar of Texas. The Title Standards impose a higher threshold than the statute, requiring the signatures of both the original parties to the conveyance and any subsequent interest holders, regardless of whether the correction is material or nonmaterial.
Nonmaterial Corrections
Not every mistake in a recorded deed needs to go to court to get fixed. Texas law allows “nonmaterial corrections” to fix small, unintentional errors—like a wrong measurement or label in the legal description, a typo in a party’s name or the date, a missing call in a metes-and-bounds description, or even a missing notarization. These kinds of issues are usually clerical or accidental.
Under the Texas Property Code, a nonmaterial correction can only be made by someone with personal knowledge of the facts relevant to the correction. Such a person must disclose in the correction deed the basis for his or her personal knowledge of the relevant facts. If the correction deed is not signed by each party to the original conveyance, the law requires that every such party and their heirs, successors in title, or assigns be notified of the nonmaterial correction and sent a copy of the correction deed. The person who made the correction must then file the correction deed of record in each county where the original conveyance is recorded along with evidence that notice was given to every non-signing party.
Here, the Title Standards impose a higher standard for due diligence. The Title Standards require a deed purporting to make a nonmaterial correction to be signed by all parties to the original conveyance and by the current owners, otherwise proper notice cannot be assumed. For this reason, an affidavit may be a better option for making a nonmaterial correction to a conveyance.
Material Corrections
Material corrections rectify more substantial mistakes in a land conveyance, such as a missing buyer’s disclaimer or mortgagee’s consent, omitted or mistakenly included lands, or swapped property identifications.
According to the Property Code, a material correction must be executed by each party to the original conveyance and filed of record in each county where the original is recorded. But theres a catch. In 2021 in the Texas Supreme Court held that only the original parties are required to sign a valid correction deed. That means that the parties to the original conveyance could execute a correction deed—including one adding or subtracting lands—even after a third party has acquired an interest in the original conveyance, without that third party’s knowledge.
Although the law protects a creditor or bona fide purchaser who acquires title without notice before a correction deed is filed, the ultimate effect of the Broadway National Bank ruling is still debated. For that reason, the Texas Title Examination Standards urge that a material correction should not be relied upon “unless all who could be adversely affected by the correction”—meaning creditors and subsequent purchasers—“have joined in its execution.”
Conclusion
Under the Property Code, a valid correction deed acts like a replacement for the original deed. It keeps the same effective date as the original, puts future buyers on notice of the corrected facts and can be used by buyers to defend their rights (except against a protected creditor or protected bona fide purchaser who did not have notice).
Bottom line: when using correction deeds, communication and consent are key. Make sure that all parties—the current owners as well as the original parties—are on board, especially when making a material correction. And when in doubt, talk to an attorney who handles real property issues.
Kuiper Law Firm, PLLC specializes in oil and gas law; if you have any questions about the information in this article, do not hesitate to contact us.