Bulletin: TX2023003

Dear Associates:

Senate Bill 801 was passed to clarify existing case law related to deeds that listed the trust as grantee. 

SECTION 1. Subchapter D, Chapter 114, Property Code was amended, by adding Section 114.087:

(a) The trustee of a trust is considered for all purposes to be the named party to an instrument that names the trust as a party to the instrument in any capacity, unless the trust is a legal entity under state law.
(b) Subsection (a) is effective as of the effective date of the original instrument.
(c) The trustee of a trust that is the named party to a recorded instrument may be, but is not required to be, identified by a correction instrument under Section 5.028.
(d) Document purporting to be a certification of trust under Section 114.086 that is recorded in the county in which real property of the trust is located is presumed to correctly identify the trust and the trustee and may be relied upon by a good faith purchaser or lender for value.

Section 5.028(a), Property Code is also amended to allow for the use of a non-material correction affidavit to identify an omitted trustee named in the trust agreement when a recorded instrument only names the trust as grantee.

What you should know:
The statute clarifies that conveyance instruments of record that show a trust as grantee without a named trustee are valid as of the effective date of the instrument. A non-material correction affidavit can be used to identify said trustees omitted from the original conveyance instrument.

What you should do:
Review the trust documentation to confirm the identity of the trustees for subsequent conveyances. If a non-material correction affidavit cannot be obtained, contact a Stewart Title Guaranty Company Texas underwriter.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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