Title Talk: “It’s the Deed that Leads!”
An important question we often face in real estate transactions is, which trumps: the terms in a real estate contract or the terms in a deed? As with any legal question, the answer is: it depends. However, due to the common law Doctrine of Merger, the answer has become more clear.
The Doctrine of Merger involves the merger of rights stemming from a real estate contract into the deed that consummates the transaction. In Rife v. Kerr, Texas Courts have defined the “deed merger doctrine” as, “a rule by which the conveyance provisions in a contract of sale of real property merge into the deed executed in accordance with the contract.”
Why is this important? Well, the Doctrine of Merger requires courts to look to the deed for real property alone in evaluating the parties’ respective rights even if the terms of the deed vary from the contract of sale.
So, which trumps: the terms in a real estate contract or the terms in a deed? It depends on the stage of the transaction. The terms and conditions in a real estate contract will control until these terms are outlined in a deed. What survives from the real estate contract are only the terms that are stated in the deed.
Title Tip: So that your contract provisions survive the Merger Doctrine, you may want to state “This covenant survives closing."