Buying property: Put it in writing!

So everyone is familiar with the phrase “my word is my bond.” It is a phrase that is meant to indicate that you can take someone’s words at face value, and that he means what he says. In terms of the law, such a phrase can be best epitomized in the idea of oral contracts. Oral contracts are essentially the same as written contracts, in terms of what they consist of, except that you don’t have to put them in writing to enforce them.[1] They happen all the time and most people have at least one or two happen in their own lives during the course of a week and they don’t even realize it. These contracts I’m speaking about are of course, your average consumer transactions that people engage in, such as going to the grocery store or the mall.[2]

Because we are so used to conducting most of our purchases orally, many people assume that you can do just about everything with a word and a shake of a hand. Unfortunately for some, this isn’t true, and it can end up getting them into trouble. There are a few transactions that a person cannot do, by law, with an oral agreement.[3] Because of the money usually involved and also the hopes in dreams of those involved, one of the most important transactions that is excluded from being conducted with an oral contract is the buying and selling of property.

Under Texas law any conveyance of land must be in writing, signed, and delivered by the person making the sale in order to be enforceable.[4] Furthermore, any contract drawn up for the purpose of conveying residential property is also not enforceable unless in writing and signed by the party charged with enforcement.[5] In addition, the rights and obligations of each party to such contracts are determined completely by the writing.[6]

So what does this mean practically? If a person attempts to orally deed a property to another, and then backs out or otherwise breaches the terms of that deed, you can’t sue them in order to enforce the deed.[7] Furthermore any oral contract that sets the terms for the actual sale of a house runs into the same problem. In addition, if there is a written contract setting out the terms of an actual sale of a house, those terms can’t be contradicted by any sort of previous or future oral agreement. The terms on the paper dictate the terms of the contract, regardless of what any person in the deal may have said during the transaction. So if someone sells you a house, and orally promises to do something like fix up the porch before the sale, but doesn’t include that promise in the written agreement for the sale, that promise to fix up the porch can’t be enforced in court.

So what can a person do to avoid this happening to them? The solution is simple. For a deed, put it in writing! The same goes with a contract for sale of a house. There are, however, a couple of things to keep in mind in terms of putting a deed in writing, because there are some technical requirements. Those requirements are that a conveyance must identify the person selling the land, identify the person buying the land, words indicating the seller is selling, and be signed by the seller.[8] Furthermore, the conveyance must identify the land being sold in some way.[9]

This seems like an awful lot of work to draw up everything that is necessary in a deed and because of this there are an awful lot of forms out there purporting to allow you to do this quickly and easily. Don’t use them! A lot of times those forms will end up being inaccurate and/or ill suited for Texas’ unique laws on property. However, the Texas legislature has provided a substitute for such quick fix forms. Section 5.022 of the Texas property code specifically provides a legally valid form to convey property in the state of Texas.[10] All you need to do is copy the language of that section of the Property Code, fill in the blanks with the information appropriate to your specific transaction, and you are good to go. As for executory contracts to facilitate the transfer of a residence, the best advice you can get for drawing those up is consult a lawyer.