Recently passed Texas Senate Bill 885 institutes a new four year statute of limitations for a quitclaim deed in the chain of title. This affords a subsequent purchaser or creditor good faith protection after the statute of limitations has run and will foster certainty regarding ownership status of real property in Texas. This new law is effective September 1, 2021.
Prior to this change, quitclaim deeds negatively impacted the chain of title in perpetuity. Texas case law states that a quitclaim deed in the property records serves as notice of potential additional claims on the property not only for the initial grantee, but also for all subsequent transferees.
The new law now provides that four years after a quitclaim deed has been recorded, a subsequent purchaser or creditor has good faith protection and does not have notice of unrecorded matters based on the quitclaim deed in the chain of title. The law gives a third party sufficient time to assert a claim while affording subsequent purchasers and creditors greater certainty and good faith purchaser status. Full text of the bill can be found here.
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