Texas Surveyors Practice Exam

Is an unrecorded deed binding and legal in Texas?

1. Yes, it is binding on all third parties

2. It is only binding upon the parties of the conveyance

3. No, it is illegal

4. It has limited validity for future claims

The correct answer is: It is only binding upon the parties of the conveyance

An unrecorded deed in Texas is indeed binding only upon the parties involved in the conveyance. This means that the seller and the buyer are legally obligated to the terms of the deed, even if it has not been recorded in the public records. However, the lack of recording means that third parties, such as other potential buyers or creditors, are not bound by the deed. Recording a deed is crucial because it provides public notice of ownership, which protects the interests of the parties involved from claims by others. If another party claims the same property after the unrecorded deed was executed, they could potentially prevail in a dispute because the unrecorded deed does not provide public evidence of the transaction. Thus, while the deed creates a legal obligation between the original parties, it does not extend that legal effect to anyone who may interact with the property later on. This is essential in real estate transactions where proper documentation is key to establishing ownership rights.