Texas Courts’ Treatment of Defective Acknowledgments in Transfer Documents

The recent decision in the Wyoming Supreme Court case Turcato v. Frady, 2024 WY 8, 542 P.3d 180, may be a surprising and perhaps worrisome outcome for many Texans. In Turcato, a failure to follow statutory requirements for notarization was NOT held to invalidate a deed, even though one of the signatures required to effectuate the deed was signed outside the presence of the notary.

While Texas has not had a case on the issue as clear as Turcato, the general theme of Texas Court decisions on acknowledgment defects is similar: defects in notary acknowledgments are not automatically fatal to the transfer document, and often can be cured with additional corrective documents. Defects such as failure to include the signor’s name in the acknowledgment (Sheldon v. Farinacci, 535 S.W.2d 938), omission of customary phrasing in the notary certificate (Webb v. Huff, 61 Tex. 677), and defects such as being taken outside the notary’s jurisdiction (Texas Osage Co-operative Royalty Pool v. James, 129 S.W.2d) are not sufficient on their own to invalidate a transfer document.

The Texas Courts’ willingness to allow corrective action for defective acknowledgment is very forgiving for parties executing transfer documents but should not be taken as a license to play fast and loose with notarization requirements. Most of these decisions were based in part on the subsequent execution of corrective documents, which carry with them additional costs in time and legal fees. Therefore, despite the acceptable margin for error for acknowledgment defects, parties executing transfer documents should exercise the highest level of attention to detail when executing these documents to avoid unwelcome corrective costs.

There are however measures you can take to avoid problems with defective transfer documents in the first place beginning with investing in title insurance to cover issues with chain of title. In general, title insurance companies have expressed great concern with these types of “naked transactions”, those that were effectuated without title insurance coverage. Special scrutiny is applied to all of these transactions that lack a sufficient evidentiary history and may make it more difficult to obtain approval for title insurance on subsequent transfers.