Expert: Russel Ray - 12/11/2011

Question
Hi. Almost three years ago I entered an agreement to purchase land which had not been subdivided and had a lien. (The seller had almost 6 acres, lived on 2, and was selling the rest.) I put some money down, and withheld payment when the seller did not meet the date on our agreement to subdivide the land as residential property in the city of Harlingen and Cameron County, TX. We communicated through the whole process. The city was making them do a lot of things they did not anticipate, and the process took them longer than expected. I decided to wait, rather than requesting a refund because it really is a great property and I’m sure they would have turned around and sold it for a higher price after they subdivided, anyway.

So the seller has informed me that the land is finally subdivided and we are ready to complete our transaction, which is great news.  Only I have some doubts...  They financed for me for about a year, until I had all the monies I owed. We did not legally record anything, as the property was not subdivided. All we did was sign/notarize a letter of agreement and kept track of all payments made.

The seller says all we do now is exchange the balance owed for the warranty deed. I am out of town now, but he says he will meet with his attorney, get the warranty deed ready and then we can meet at his home to make the exchange. We have met there plenty times before and that's no problem for me, but is it really that simple? How do I know the land is now subdivided as residential property? Am I supposed to get a land survey from them? They obviously had to do one to get the land subdivided. Also, how do I know tax information? Since it has just been subdivided, I’m assuming nothing is owed. Where do I find that out, for sure?

Oh and almost 3 yrs. ago, I found some info on a law that says something about the seller providing a credit for the buyer for septic system. I think the credit is available for some time, but if the buyer does not know of it/uses it, then the seller does not pay for that. I brought that subject up before, and the owner just commented "you know a lot for not knowing a lot" so I know there was some truth to that credit -but I cannot find info on it now that I need it! Have you heard of such a credit or have any idea what I may be talking about?

Sorry I have bombarded you with so many questions. I hope you can help clear this up a little for me, as my date to meet with the seller is coming up next week. Any advice is appreciated.   Thanks!

Answer
Hey, Karla.

In simple terms in a Warranty Deed in Texas, the seller (Grantor) merely guarantees to the buyer (Grantee) that Grantor can convey the property and has good, clear and valid title to it.

It can get much more complicated, and it's the complicity that you actually want, the additional warranties and covenants (both present and future) against encumbrances, for quiet enjoyment, to defend you against any and all later claims, etc.

As a native Texan and a person who still owns properties in Texas, there's really only one answer to all your questions:

You need a Texas real estate attorney to help you protect your interests.

Do not try to do this long distance with just letters of agreements, manual tracking, and a Warranty Deed.

Hope that helps.

Russel