Ambiguous, Disputed, Lost, Forged and
Fraudulent Deeds in Texas

Topics Covered

Construction of Ambiguous and Disputed Deeds
Lost and Destroyed Deeds
Forged and Fraudulent Deeds
New Criminal Statutes

CONSTRUCTION OF AMBIGUOUS
AND DISPUTED DEEDS

Ambiguous Deeds and the Intent of the Parties

Certain central principles apply in the interpretation of ambiguous and disputed deeds. First, courts look at the express intent of the parties as reflected by actual wording, not what the parties subjectively believe they were trying to say. In the event of ambiguity or controversy, the goal of a court in interpreting a deed is “ascertaining and effectuating the parties’ intent . . . by conducting a careful and detailed examination of the deed in its entirety.” Wenske v. Ealy, 521 S.W.3d 791 (Tex. 2017).

In construing a deed, courts “must ascertain and give effect to the parties’ intentions as expressed in the agreement . . . because once a dispute arises over meaning, it can hardly be expected that the parties will agree on what meaning was intended. . . .” Wright v. Jones, 674 S.W.3d 704 (Tex.App.—Waco 2023, no pet.).

“In determining intent . . . a court may consider facts and surrounding circumstances at the time of the instrument’s execution but only to the extent they inform the meaning of the instruments’ text. Montgomery v. ES3 Minerals, LLC, 697 S.W.3d 397 (Tex.App.—El Paso 2024, no pet.).

Harmonizing the Instrument

Courts should “consider the entire writing and attempt to harmonize and give effect to all the provisions of the [deed] by analyzing the provisions with reference to the whole [instrument and avoid constructions that are] unreasonable, inequitable, and oppressive. . . . As to extrinsic evidence outside the four corners of the deed, “evidence of intent is admissible only if the deed is ambiguous on its face. . . . A court may consider the parties’ interpretations of the [deed] through extrinsic or parol evidence only after [the deed] is first determined to be ambiguous. . . . A mere disagreement about the proper interpretation of a deed, however, does not make the deed ambiguous; the instrument is ambiguous only if, after application of the rules of construction, the deed is reasonably susceptible to more than one meaning.” Wright v. Jones, cited above.

“The Supreme Court of Texas has repeatedly affirmed its commitment to a holistic approach aimed at ascertaining intent from all words and all parts of the conveying instrument. To the extent possible, apparent inconsistencies or contradictions must be harmonized by construing the document as a whole.” Montgomery v. ES3 Minerals, LLC, cited above. “When appropriate, a court may determine, as a matter of law, that multiple separate [deeds or contracts may be reasonably construed as] a single, unified instrument [in order to give effect to the intent of the parties].” Reider v. Woods, 603 S.W.3d 86 (Tex. 2020).

Construction Favors the Grantee

“In Texas, deeds are construed to confer upon the grantee the greatest estate that the terms of the instrument will allow. A deed will pass whatever interest the grantor has in the land, unless it contains language showing the intention to grant a lesser estate.” Parker v. Jordan, 632 S.W.3d 108 (Tex.App.—El Paso 2021) affirmed by the Texas Supreme Court Dec. 20, 2022.

It “is a rule of construction of deeds that they are to be most strongly construed against the grantor and in favor of the grantee, and this rule applies to reservations and exceptions. . . .” Wright v. Jones, cited above.

With regard to ambiguity in deeds, an obvious question presents itself: Why allow ambiguity to arise at all? Why not clearly and expressly state the entire agreement of the parties within the four corners of the instrument? In order to avoid disputes, it is important to customize a deed in order to thoroughly reflect the intent and purposes of the parties as opposed to using a minimalist standard-type template.

LOST AND DESTROYED DEEDS

Deeds that are Lost or Destroyed

What happens when an unrecorded deed is lost or destroyed? “A deed or other document is not made ineffective by its destruction or loss. . . . Production of the original document is excused when it is established that the document has been lost or destroyed. . . . Other evidence of the contents of a writing is admissible if the original has been lost or destroyed. . . . Loss or destruction of the document is established by proof of search for this document and inability to find it.” Gause v. Gause, 496 S.W.3d 913 (Tex.App.—Austin, 2016, no pet.).

There is also the doctrine of lost grant or presumed lost deed which states that a long-standing chain of title “may be established as a matter of law in cases where the deeds [or a gap in the chain of title] are ancient and the evidence is undisputed. . . . A prerequisite for proving the doctrine applied as a matter of law is the presentation of undisputed evidence establishing a gap or defect existed that involved ‘ancient’ deeds. . . . The events to which the presumption of lost grant has been applied usually occur when there is a gap in title before the twentieth century.” Balmorhea Ranches, Inc. v. Heymann, 656 S.W.3d 441 (Tex.App.—El Paso, 2022, no pet.).

FORGED AND FRAUDULENT DEEDS

Red Flags

The following are warning signs that one might be dealing with a fraudster with a forged deed:

Seller accepts the first offer without negotiation
Seller is in a rush to close
Seller resides elsewhere and must close remotely
Seller’s proceeds are to be wired out of town

Forgery of a deed or deed of trust is a felony under Penal Code Sec. 32.21. An array of other civil and criminal laws potentially applies in the area of fraudulent and forged deeds. A non-exclusive list:

Government Code Sec. 51.901. Fraudulent Document or Instrument
Government Code Sec. 51.9035. Action on Fraudulent Conveyance
Government Code Sec. 51.904. Warning Sign regarding Fraud
Government Code Sec. 406.0091. Non-Appearance – Notary Public
Local Government Code Sec. 191.010(b). Photo ID When Recording
Property Code Sec. 5.0206. Owner’s Affidavit Regarding Conveyance
Property Code Sec. 5.0207. Court Findings on Purported Conveyances
Property Code Chap. 12. Recording of Instruments
Business & Commerce Code Chap. 17. Deceptive Trade Practices Act
Business & Commerce Code Chap. 27. Statutory Fraud
Civil Practice & Remedies Code Chap. 12. Fraudulent Property Claims
Penal Code Sec. 31.23. Real Estate Theft
Penal Code Sec. 32.21. Deed Forgery is a Felony
Penal Code Sec. 32.60. Real Estate Fraud
Penal Code Title 7. Offenses against Property (Includes Deed Forgery)
Penal Code Title 8. Perjury and Falsification)
Code of Criminal Procedure Art. 12.01. Felony Statutes of Limitation
Common Law Fraud and Misrepresentation

A fraudulent or forged deed is a void deed, but affirmative action must be taken in order to establish that the deed is not legitimate. A finding of fraud does not happen automatically, merely upon allegation or notice to the offending party—even if that notice is filed in the real property records.

Homeowner Affidavit of Fraud

Property Code Section 5.0206 provides that an“owner of real property may file for recording in the real property records of the county in which a document or instrument purporting to convey title to or an interest in the real property [is fraudulent].” Although this action does not affect or change existing title as reflected in the real property records, filing the affidavit establishes a presumption of fraud if no opposing affidavit is filed within 120 days.

Verified Motion Alleging Fraud

If a controverting affidavit is not timely recorded then the true owner may file an expedited motion in district court requesting a court order declaring the fraudulent document to be null and void. Government Code Section 51.903-9035 states: “An owner of real property who has reason to believe that a document or instrument purporting to convey title to or an interest in the real property and recorded in the real property records is fraudulent may complete and file with the district clerk of the county in which the document or instrument is recorded a [verified] motion. . . .”

A successful motion results in a district judge issuing findings of fact and conclusions of law, the approximate equivalent of a judgment. Although this process is not technically a lawsuit, filing such a motion requires litigation—the matter must still be brought and prosecuted before a district court. Tex. Gov’t Code 51.901(c) and 51.9035; Tex. Prop. Code 5.026 and 037.

County Clerk Action

Government Code Section 51.901, entitled “Fraudulent Document or Instrument,” requires a county clerk to act if there is “a reasonable basis to believe in good faith that document or instrument previously filed or recorded or offered or submitted for filing or for recording is fraudulent:”

Gov. Code Sec. 51.901(d). If [there is probable cause to believe that] a document or instrument . . . submitted for filing or recording [that seeks] to create a lien against or assert a claim to or an interest in real or personal property is fraudulent, the clerk [may decline to accept the document for recording until] the county or district attorney [determines] whether the document is fraudulent [or] request that the prospective filer provide . . . additional [supporting documentation].

County clerks are required to make a criminal referral to the district attorney if they are presented with a deed they believe to be fraudulent. The true property owner must be alerted to the event within two business days. Gov’t Code Sec. 51.901.

Real Property Fraud

Texas Penal Code Section 32.60 creates the offense of real property fraud which is defined as making, presenting, or filing a groundless or forged real property document with the intent to cause another person to suffer financial injury, obtain an illegal benefit, or cloud title to land. This statute is primarily used to prosecute title theft and deed fraud schemes that include intentionally making false written statements to obtain real property; fraudulently causing a person to sign documents affecting real property without their consent; and causing a county clerk to record fake judgments, liens, or title claims against someone’s property without the owner’s consent.

Real Property Theft

Texas Penal Code Section 31.23 creates the offense of real property theft, which occurs when a person intentionally, knowingly, or recklessly deprives an owner of real property or a nonpossessory property interest (such as an easement or mineral right) through a fraudulent or forged instrument. Real property theft is a first-degree felony if the market value of the property is $300,000 or more. Penalties can be enhanced if the victim possesses a homestead exemption or is disabled, or over the age of 65.