Texas Warranty Deed with Vendors Lien (Third-Party Lender)

On a lender-financed purchase of Texas real estate, the seller's security for the unpaid price does not disappear when a bank funds the loan; it changes hands. The Texas Warranty Deed with Vendor's Lien (Third-Party Lender) is the deed that moves it. The grantor conveys with a covenant of general warranty, retains a vendor's lien and superior title to secure the buyer's purchase-money note, and in the same instrument transfers both to the lender that advanced the money.

Why the superior title travels with the lien

Where a Texas deed expressly reserves a vendor's lien to secure the purchase money, the superior title stays with the vendor until the price is paid. That superior title does not follow a note on its own: a transfer of the purchase-money note carries the lien, but the superior title passes only when the deed says so. Section 9 of this deed says so. It retains the first and superior vendor's lien and superior title for the lender's benefit, transfers both to the lender without recourse against the grantor, and recites that the lender, at the grantee's request, paid in cash to the grantor the part of the price the note evidences. Civil Practice and Remedies Code Section 16.035 treats both as real property liens, enforceable within four years after the cause of action accrues.

A general warranty beneath the lien

The conveyance beneath the lien follows the Property Code Section 5.022 pattern: GRANTS, SELLS, AND CONVEYS, joined to a covenant binding the grantor, with the grantor's heirs, executors, and administrators, to WARRANT AND FOREVER DEFEND the property against every person whomsoever lawfully claiming it, a promise reaching any defect in the chain of title. A reservations and exceptions section lists the recorded restrictions, easements, and current-year taxes the conveyance and warranty are made subject to.

Three instruments, one closing

The promissory note and the deed of trust are the buyer's instruments, signed with the lender and not part of this package; the deed identifies them by reciting the note's date and principal amount, the lender's name and address, and the trustee named in the deed of trust. Article XVI, Section 50(a)(1) of the Texas Constitution lists the purchase money among the debts for which a homestead is not protected from forced sale, which is why a lien securing the price stands apart from most other liens on a Texas home. When the note is paid according to its terms, the deed by its own words becomes absolute; the lender's release of lien, recorded separately and not included here, shows the discharge in the records.

Who signs and who does not

The deed recites one or two natural persons as Grantor in a free-form block carrying their names and the status words they use, with two signature blocks headed GRANTOR and SECOND GRANTOR (if applicable) and a separate acknowledgment certificate for each; a lone seller leaves the second block unused. A married seller whose spouse joins the conveyance of the homestead under Family Code Section 5.001 presents the two-signature record the second block carries. Neither the grantee nor the lender signs: the grantee's obligations live in the note and deed of trust, and the lender's rights rest on the transfer the grantor makes in Section 9. The form is not set up for an entity, trustee, or attorney-in-fact seller, nor for a seller-financed sale in which the note runs to the seller, which takes a different retention clause from the one printed here.

Into the county records

The deed is formatted for the Texas recording statutes: letter-size pages within Local Government Code Section 191.007, a printed name under each signature, the Property Code Section 11.008 confidentiality notice at the top of page one, and a grantee mailing address that keeps the filing fee at the standard rate under Section 11.003. It is recorded with the county clerk of the county where the property is located, ordinarily immediately ahead of the deed of trust; Section 13.001 leaves an unrecorded deed void as to a later purchaser for value without notice, and Texas collects no deed transfer tax.

The package holds three items: the blank deed as a fillable PDF behind a non-recorded instructions page, a completed example that documents a Fort Bend County purchase financed by a Texas bank, and a plain-language guide covering every numbered section, the Texas decisions behind the vendor's lien, the forms of co-ownership a grantee may take, signing, and recording. The materials are informational and are not legal advice.