What is a Special Warranty Deed?
A special warranty deed is a legal instrument used in real estate transactions that provides the buyer, or grantee, with a guarantee from the seller (grantor) against any legal issues or claims against the property that arose during the time the seller owned it. Unlike a general warranty deed, the protection offered by a special warranty deed does not cover any defects in title that may have existed before the seller’s ownership.
Protection for Buyers
The special warranty deed strikes a balance between the broad protection of a general warranty deed, which covers all title defects, and a quitclaim deed, which offers no warranties at all. It ensures that the seller is responsible for any title issues or claims that emerged under their ownership, but not for those that may have been present before. Essentially, the lender or seller of the property is saying that he or she is granting the property to a new owner in exactly the same condition that it was received.
Legal Considerations
While a special warranty deed offers some assurance regarding the title’s integrity, it does not eliminate the need for thorough due diligence. Buyers should consider title insurance and are strongly advised to consult with a real estate attorney. An attorney can provide insights into how this deed fits within the broader context of your real estate transaction and help mitigate potential risks.
Comparing Deed Types
An attorney or law firm like us can help determine the type of deed to use, but in short, you’ll want to consider the following:
- General Warranty Deed: Offers the most comprehensive protection against all title defects, past and present.
- Quitclaim Deed: Provides no warranty, passing only the interest the seller has at the time of the sale, if any.
This article is for general informational purposes only and does not establish an attorney-client relationship. Please contact a licensed attorney in your state of residence.
