When
is it safe to use a lot and block legal?
It
is alright to use a lot and block legal so long as all information is included
(lot, block, if applicable, subdivision name as shown on the plat, section
number, if applicable, recording information of the map or plat, and the names
of the county and state in which the lot is located).
What
if there is no recording information for the plat?
Generally,
if there is no recording information, the lot and block is inadequate and
a survey should be required to prepare a field note description with measurements
of distances and angles of the perimeter of the property (usually referred
to as a ‘metes and bounds’ description). Many subdivisions in
Texas are so-called "red line subdivisions" where developers did
not meet local governmental requirements for platting and no plat was recorded.
Lot and block descriptions are inadequate in such subdivisions and a metes
and bounds description must be included in the deed of trust for the lien
to be valid.
An
exception to this rule are very old plats in subdivisions which were developed
prior to there being county real property records. (An example would be an
old subdivision in the Houston Heights). These old unrecorded plats are "grandfathered"
and title companies do not require recording information to insure on a lot
and block legal. When in doubt, the prudent lender will require a survey and
a metes and bounds description.
What
about condominium and townhome legals?
A
condominium unit is a creation of statute and is subject to the provisions
of Title 7 of the Texas Property Code. The owner of a unit usually owns the
right to use the airspace inside the interior walls and the surface of the
interior walls of the unit, and has a percentage interest in the "bricks
and sticks" of the project in common with all the other unit owners.
To be a condominium, the condominium declaration must be filed in the real
property records of the appropriate county (some early condo declarations
were recorded in the real property records but more recently, most county
clerk’s offices have separate Condominium Records). The legal description
must include the unit number, the building number, the name of the project,
the recording information of the declaration and amendments, and the names
of the county and state. The percentage ownership interest in the general
common elements is no longer required to be part of the legal description
as percentage ownership is reflected in the condominium declaration.
In
a townhome unit, the owners own the "bricks and sticks" and the
"dirt" under the unit. It is very similar to a lot and block, detached
home, except a townhome unit may have one or more walls and a roof in common
ownership with one or more other unit owners. Many times, a townhome unit
owner will not be responsible for maintenance of the exterior of the unit.
This is determined by the declaration or deed restrictions applicable to the
project and should be reviewed by the lender as part of the underwriting process.
The legal description will be a metes and bounds description unless the townhome
units are platted as lots, in which case the legal description will be by
lot and block.
What
about residential units on ground leases and cooperative housing?
It
is extremely rare in Texas to find houses constructed on tracts under long
term leases. Although there are forms of cooperative housing in Texas, this
legal structure is also rare. In either case, an attorney should be consulted
before committing to loan on these forms of housing.