Owelty Lunacy - Part One: Can an owelty be created by implication?

I got this email from someone who found me on the internet.

Hello,

I'm no legal scholar but searching for hours got me to the following blog post.... [NOTE: The article is currently here: https://386589.us18.myftpupload.com/2018/02/can-an-owelty-lien-be-implied-the-story-of-a-post-divorce-miracle/ (https://386589.us18.myftpupload.com/2018/02/can-an-owelty-lien-be-implied-the-story-of-a-post-divorce-miracle/) These blogs may be updated on a new platform soon so visit and just search for "Owelty implied" – it should lead you right to it.]

So I thought I would chime in here and beg your opinion of this situation, haha. If you need to, feel free to stop here and hit delete 🙂 Thanks so much in advance, either way.

I have been seeking a HELOC from a popular Texas based financial entity that I will just call Refi Bank. After providing much information, then came a "problem" in the title search. This problem seemed to be someone reading something(owelty) in a divorce decree that wasn't even there. Maybe I am making it worse than it is. But they want me to file something with the county that I am having a hard time wrapping my head around. When I started my journey of discovery on this "problem" a few days ago, I had no idea what owelty even meant. I just knew that the Refi Bank wanted so badly to stave off the voodoo of such a thing that I must do cartwheels to prevent it.

The background of it is I got a DIY divorce 3+ years ago. I got the house. My ex-wife got most of the vehicles and a new RV. Our house had already been paid off for 4 years. We had a fair amount of credit card debt at the time. So I got a home equity loan, paid off all the debt I could, bought her an RV and gave her $24,000. All this was captured for posterity on our basic texaslawhelp.org FM-DivA-201 DIY divorce form. No mentions of funds coming from a refi. We already had the refi 2 months before the divorce day with the judge. No mention of owelty because I typed the form myself and that word was not in my vocabulary at the time.

• Part 8B2 of that form addresses husband taking possession of community property (house)

• Part 8D2 of that form addresses wife taking possession of community property (NONE)

• Part 8D5 of that form addresses wife's vehicles (4 cars, 1 atv, 1 New 42 ft RV)

• Part 8D6 of that form addresses wife also keeps the following property (A sum of cash in the amount of $24,000)

Now Refi Bank wants me to be a lawyer, or get a lawyer to properly create and file a Release of Owelty Lien for a Lien that doesn't exist and can't, from what I can tell, be resurrected from a 2023 certified divorce decree that has no mention of such things.

And from reading your blog post I don't think I see how it could have even been hinted at. Since it is a refinance at their Bank my only connection to a title company that could possibly normally help with this is tucked away from me behind their back office. So, I can't appeal to an underwriter as you did to reason my way through this. I have talked to my ex. We can create and sign whatever we need. But they will not even provide any language that they (the title company) themselves want to see once it is filed. Because realistically this is solely to appease them since they have the money and I want the money. Their reasoning is that if a claim is made in the future they are protected. But I think a standard preemptive fix to a future non-standard claim is useless.

So, does it even make sense to create such a filing? What should it be called? What language should it include since there is not really any language in the DIY decree for it to counteract? Have you seen other instances of this? Is this a situation unique to me?

Thanks so much for listening

T. L.

T.L.,

Thanks for writing.

This is so simple. I would need to see your decree to fully answer your questions, but even without it, the fix is simple and quick. We do it at a cost of about $75–$100 (less if it's part of a "package" in a divorce).

Here's the fix. Sign the Release in the presence of a notary and give it to the title company. They will probably file it for you as a courtesy. The filing fee will be charged to you at closing. The release is usually one page. The fee will probably be less than $20.

The title company does not want to prepare the release of lien for you because doing so could constitute legal representation. That's important with any company that deals with legal documents. In fact, you will sign a document at closing stating that the title company is NOT representing you.

No big deal. We can do it. Or any Texas attorney could. The actual work is so small that it's probably hard to get an attorney to do it. 😊

This time – DO NOT DIY your way through it. It's not worth it. The release would typically reference a filed Deed of Trust to Secure Owelty of Partition. Without such a filing, the language in the release will most likely have to reference the divorce cause number and other identifying information. I deal with this stuff all the time but I would pay an attorney to do it right.

The attorney we use for legal documents owns his own title company and must insure the transactions he closes. That means he knows exactly what title companies need to see. He's the best.

The last thing you want is to not have that lien released in the world of real estate and title.

Even if no valid lien was ever created, the purpose of the release may simply be to eliminate a potential claim against the title. Recording the appropriate document can resolve the title company's concern without necessarily acknowledging that an enforceable lien existed in the first place.

Once it is filed, ask for a "file-stamped" copy. It will have the document number, date of filing, etc. Keep that until Jesus comes or until you sell the property. No. Keep it until Jesus comes, now that I think about it.

Now, why you might be wrong about your decree not having an Owelty.

You're probably totally correct about the decree not mentioning "owelty."

But here's what I want you to understand: The word "owelty" does not, by itself, create an owelty interest or lien against the property. And it can exist separate from any filed property-related documents like the Special Warranty Deed or a Deed of Trust to Secure Owelty (of Partition). An owelty interest is created by a court order or an agreement between owners of the property.

The Texas Constitution limits the types of debts allowed against a homestead property (that is, an owner-occupied, primary residence).

You can read about it in beautiful legalese at: Article XVI, Section 50.

An owelty of partition is the third of eight allowable lien types or debt types that can be secured by homestead properties.

• The homestead of a family, or of a single adult person, shall be, and is hereby protected from forced sale, for the payment of all debts except for: (1) … (2) … (3) an owelty of partition imposed against the entirety of the property by a court order or by a written agreement of the parties to the partition, including a debt of one spouse in favor of the other spouse resulting from a division or an award of a family homestead in a divorce proceeding;

The text defines the authority for the creation of an Owelty of partition. It specifies this authority but does not limit its use to only homestead properties. That's another discussion, not for here.

The Owelty is created by either 1) a court order or 2) agreement of the parties to that partition. Remember, this is only defining a type of lien that may be placed on a homestead property. This part of the Constitution is not about Owelty liens. It is about what is allowed as a lien (for debt) on HOMESTEAD properties.

It's a definition by negation: The Constitution tells us which debts may be secured by a homestead by first prohibiting all others.

For now, just know that this language is important for the definition of an Owelty; but even that does not fully define and describe what an Owelty is.

Here's why this is important in your case. The divorce decree seems to be the only document that has alerted the title company that there might be an Owelty interest (lien) payable to your ex-spouse. So, if any language in the decree ties that $24,000 to the awarding of the house to you, an Owelty interest has been created by order of the court. (A decree becomes a court order when the judge signs it.)

Here are the three elements in a decree that will clearly create an Owelty interest:

• Clear awarding of the property to one party and clear divestiture of the other party in that property. "Hereby awarded to…" and "…divested of all rights and interest in…"

• The complete and accurate legal description of the property (usually found in a recent warranty deed or deed of trust).

• A money interest for the exchange.

#1 and #2 create conveyancing – the transfer of ownership so to speak; but really the transfer of one party's interest in the property to the other party so that the awarded party owns all of the property. Remember that phrase in the Constitution, "entirety of the property." The lien can be placed ONLY on the entire property, not just a part of it.

#3 creates the amount owed to the departing spouse.

The proper way to file that is with a Special Warranty Deed with Encumbrance for Owelty of Partition.

The Warranty Deed part covers #1 and #2; #3 is covered by the Encumbrance for Owelty of Partition.

But, there is no such language, you say. (I have not seen the decree so I cannot judge for myself). Fair enough. But, if there is even a hint that the $24,000 was an exchange for your spouse giving her interest in that house to you (roughly called you "getting the house"), then the title company will want to record satisfaction of that interest (lien).

Two reasons come to mind: 1) For all they know, that could have been the intent. And 2) if you did not have representation (a lawyer), they imagine all sorts of misunderstandings and will want to get the right paperwork just in case. Any court could be very forgiving to pro se parties who say "we didn't know…" And for want of a simple piece of paper signed by your ex, they could end up spending thousands of dollars defending themselves in court.

Here is the way I describe this in my CLE courses:

You can put the word "owelty" all over your decree, on every page if you want; and still not create an owelty lien (or interest).

You can totally avoid the word "owelty" in your decree if you want; and still create an owelty lien (or interest).

The three elements above create the owelty interest in a divorce decree.

Next: Owelty Lunacy Part Two: How to create an owelty interest after final divorce when no owelty was created in the decree.

Noel Cookman

November 4, 2026