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Article of Interest

Correction Instruments in Texas: Nonmaterial Corrections under Section 5.028 of the Texas Property Code
By:  Matt Douglas

Correction instruments are used to correct errors contained in an instrument that has been filed of record.  Texas courts have long recognized the validity of correction instruments, and so long as the correction instrument is properly executed and recorded in the county where the original instrument was filed, the correction instrument wholly takes the place of and acts as a substitute for the original instrument.  Prior to recent changes in the Texas Property Code, making a correction to a recorded instrument required all parties to the original instrument to execute the correction instrument.  Effective Sept. 1, 2011, Section 5.028 of the Texas Property Code allows a person with personal knowledge of facts relevant to the correction of a recorded original instrument to prepare or execute a correction instrument to make a nonmaterial change that results from a clerical or inadvertent error, without requiring the joinder of each party to the original recorded instrument.

Some examples of the nonmaterial corrections that can be made under this section include: (1) correction of an incorrect element in a legal description, such as the lot number or subdivision (except when the grantor in the original instrument also owns the property which is inaccurately identified in the original instrument); (2) the addition, correction or clarification of a party's name or marital status, the execution date of the instrument, or recording data referenced in the correction instrument; (3) the addition of a legal description to an instrument when it was prepared in connection with the original instrument, but inadvertently omitted from the original instrument; and (4) the correction of a defective acknowledgment or addition of an omitted acknowledgment to the original instrument.

When making a nonmaterial change under Section 5.028, the parties to the original instrument are not required to execute the correction instrument.  Instead, a person with personal knowledge of facts relevant to the correction of a recorded original instrument may prepare or execute the correction instrument.  In order to be effective, the person who is executing the correction instrument must (1) state the basis of the person's personal knowledge of the facts in the correction instrument, (2) send a copy of the correction instrument and notice to each party to the original instrument (or their heirs, successors and assigns) by first class mail, email or "other reasonable means," unless the correction instrument is signed by each party to the original instrument, and (3) record the correction instrument and evidence of notice in each county where the original instrument was recorded.

A correction instrument made under Section 5.028 is effective as of the effective date of the original instrument, takes the place of and acts as a substitute for the original instrument, and provides record notice of the facts contained in the correction instrument.  However, the correction instrument is subject to the property interest of creditors and subsequent bona fide purchasers for valuable consideration without notice who acquired the property on or after the date of the original instrument, but before the correction instrument was acknowledged and recorded.

Section 5.028 provides a quick and efficient alternative for title companies, banks, and attorneys when corrections to a recorded instrument are necessary, but the parties to the original transaction cannot be located or are uncooperative.  In such a case, those persons who were involved in the original transaction, such as a closer at a title company, a loan officer at a bank, or an attorney who drafted the original instruments may execute the correction instrument without the joinder of each party to the original recorded instrument.  However, it is important to note that certain changes are considered material corrections.  These types of corrections cannot be made under Section 5.028 and require the correction instrument to be executed by all of the parties to the original instrument.

Section 5.028 is a great tool to keep in your arsenal when you need to make a quick nonmaterial change that results from a clerical or inadvertent error.  While proofreading should always be a top priority, if a mistake happens, remember Section 5.028 of the Texas Property Code.

Matt Douglass is an associate with Sprouse Shrader Smith PLLC whose practice focuses primarily on real estate, banking and oil and gas.