Closing Properties in an Estate

It is not unusual for a title company to handle a transaction in which the last person in the recorded chain of title for a piece of property is deceased.  When this happens, title companies must rely on the Texas Estates Code to determine who has authority to sell the deceased person’s property.  A person who dies with a will is said to have died testate.  When a person dies testate, typically the terms of the will dictate who has authority to act on behalf of their estate and what actions that person(s) can take with regard to property.  When a person dies without a will, they are said to have died intestate.  The Estates Code sets forth procedures for probating the estates of both testate and intestate individuals.

Wills are not required to be probated in Texas, however title companies prefer that they be probated and the statutory requirement followed during the probate process.  It typically takes several months to probate a will in Texas.  An application and the will must be filed with the probate court, the court must approve the application and appoint an Executor (generally the person or persons named in the will if the person dies testate) or an Administrator, notices must be published so that creditors and anyone else interested in the estate can make their claim and an inventory of the assets of the estate must be prepared and approved.

Probates where the Will allows for the sale of property and in which the Probate Court appoints and Independent Executor or Independent Administrator do not require any further action by the Probate Court.  If the Will does not allow for the sale of property, or if the probate is a Dependent Administration, Court approval may be required in order for the property to be sold.  In a Dependent Administration, there is a four step process that the Administrator must follow in order to sell the property which includes filing an Application with the Court to sell the property, Reporting to the Court that the Property is under contract and getting a Decree from the Court affirming that the property can be sold.  This four step process may take in excess of thirty days to complete.

If you have a property that is currently part of an estate, it is a good idea to contact a title company before you list the property for sale so you can understand both the statutory and title company’s requirements.  This will allow you to set reasonable timing expectations for your prospective buyers.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.                       Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

Muniment of Title

When an individual passes away without a Will, the law determines the heirs of that person and all property of the decedent passes to those heirs in percentages that are prescribed by law.  A Will is a wonderful way for the individual to designate to whom property should pass, eliminating the statutory heirs.    If the individual dies with a Will, but the estate contains only real property that needs to be passed under the terms of the Will, probating the Will as a Muniment of Title may be a more cost effective way of passing title to the property.

Probating a Will as a Muniment of Title is simply presenting the Will to the Probate Court and asking the Probate Court to legally recognize the transfer of title to the property as indicated in the Will.  Unlike the normal probate process, no Executor is appointed, no Inventory is required, and the process is much less time consuming – thus saving money.  Unlike executing Affidavits of Heirship for the deceased individual, probating a Will as a Muniment of Title eliminates title passing to any heirs that were not named as recipients of the property in the Will.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800

Tax Sale Property

Properties purchased at tax sales carry particular concern for title companies.  The Texas Tax Code governs the sale of properties pursuant to a court ordered tax sale.  Under the Tax Code, the deed from a tax sale vests good and perfect title in the purchaser to the interest owned by the defendant in the property subject to the foreclosure, including the defendant’s right to the use and possession of the property, subject only to the defendant’s right of redemption, the terms of a recorded restrictive covenant running with the land that was recorded before January 1 of the year in which the tax lien on the property arose, a recorded lien that arose under that restrictive covenant that was not extinguished in the judgment foreclosing the tax lien, and each valid easement of record as of the date of the sale that was recorded before January 1 of the year the tax lien arose. The deed may be impeached only for fraud.

The redemption period for a residential homestead or property designated as agricultural is two years from the date the tax sale deed is recorded.  For other properties, the redemption period is six months from the date the tax sale deed is recorded.  In addition to the statutory redemption periods, there are also statutes governing the time available for the defendants in the tax suit to appeal the underlying judgment or challenge the sufficiency of notice.  The statutory redemption periods, challenges available to defendants in the underlying suit and ability of the deed to be impeached for fraud create a minefield of potential issues for title companies.  Many title company underwriters refuse to be the first to insure following a tax sale, while others require a minimum of four years to pass following the date the deed is recorded before they will insure.  Closing prior to four years following recordation of the deed can be accomplished, but only with underwriting approval.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.  Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.