When a property is being conveyed that was awarded to the owner by court order, such as in a divorce, title companies typically request that the person who was divested of title execute a deed to the person who was awarded title. This seems a little counter-intuitive, as a court order alone is sufficient to vest and divest title. There is, however, some method to the madness.
Many court orders that award title to one party contain a requirement that the divested party execute a deed transferring title. Even if the court order does not contain such a requirement, the execution of the deed is affirmation by the divested party that the court order divesting the property is final and not subject to appeal. Additionally, the same court order which divests someone of title may also award a monetary sum to the same person and create a lien against the property to secure payment of the awarded amount. A deed executed by the divested party can, and should, contain reference to the lien so that anyone reviewing title to the property would know that money was owed to the divested party.
Beyond establishing the finality of the court order, another reason title companies request a deed from the divested party is to establish a clear chain of title in the real property records. Court orders are public record, but they are typically filed only in the records of the court itself, so someone researching only in the real property records would not be locate the court order. The alternative to recording a deed is to record the court order in the real property records. This option may not be appealing to the parties as the entire divorce decree or other agreement containing the court order must be recorded. That means that the recording costs can be quite expensive due to the number of pages in the document, and a great deal of information that is not relevant to the chain of title is now readily available in the real property records.
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