What Is A Special Warranty Deed?

A special warranty deed, also known as a limited warranty deed, is used when the seller of a property (grantor) only guarantees that the property incurred no outstanding claims or liens during their physical ownership. This type of deed does not protect the buyer (grantee) from any defects in the clear title before the grantor took possession. As its name suggests, this type of deed is typically only used for certain types of deed transfers.

If you are considering a special warranty deed or would like a professional real estate attorney to review your property deed to determine the type of deed that’s best for your real estate transfer, schedule a free, no-obligation case consultation with the attorneys at Goosmann Rose Colvard & Cramer, P.A. today.

When To Use A Special Warranty Deed

A grantor may opt to use a special warranty deed when they can only guarantee that the property wasn’t encumbered during their ownership. This can occur during:

  • Commercial property transactions. A special warranty deed is usually used for commercial property transactions because a business property may go through several owners, none of whom want to be held liable for what occurred during a previous owner’s tenancy.  
  • Foreclosures. Buyers should be wary of special warranty deeds on foreclosed properties. If a previous owner had trouble making property payments, they most likely had other financial troubles. A new owner might expect to pay back taxes or other fees to remove any liens on their new property.
  • Estate transactions for a deceased owner. When an executor is handling the property of someone who passed away, they may only be able to attest that the property has no current liens that occurred under the previous owner.

Other Types Of Deeds

While sometimes necessary, special warranty deeds do not offer as much protection for the buyer as a general warranty deed. As one of the most secure property deeds and used in most transfers, a general warranty deed guarantees the grantee will be receiving a title that is free of debt, claims, or other legal encumbrances. 

Although special warranty deeds don’t offer the most protection for buyers, it offers more than a quitclaim deed. A quitclaim deed, sometimes referred to as a non-warranty deed, simply transfers any interest the grantor has in the property to the grantee without any guarantees. 

Protection For The Buyer

If a buyer wants to add an extra layer of protection when purchasing a property through a special warranty deed, title insurance can be a sound investment. This type of indemnity insurance can protect a buyer against financial claims against the title of their property.

A title search can also be done before the transaction to uncover any liens or claims to the title. However, title searches can be extensive, and there is the possibility that something can be missed during the process. Because of this, it’s best to hire an experienced real estate attorney to conduct a title search on your behalf.

How A Real Estate Lawyer Can Help 

Purchasing real estate is a costly endeavor riddled with a myriad of local and state stipulations. A real estate attorney can help advise you on state laws, draft and review your deed transfer, examine a title insurance policy, conduct a title search, and advise you throughout the process to ensure that the transfer goes as smoothly as possible.

Whether you are buying or selling real estate, the attorneys at Goosmann Rose Colvard & Cramer, P.A., are committed to providing professional services that protect your interests.