Special Warranty Deed

Special Warranty Deed Deeds Title Warranty Property Conveyance Real Estate Grantor Grantee
A type of property conveyance deed in which the grantor limits the title warranty given to the grantee to claims arising only by, from, through, or under the grantor, and does not cover defects arising before the grantor's ownership.
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Special Warranty Deed

A Special Warranty Deed is a legal instrument in real estate that conveys ownership from a seller (grantor) to a buyer (grantee). Unlike a General Warranty Deed, a Special Warranty Deed limits the warranty provided by the grantor to only defects and claims that may arise during the period the grantor owned the property. The grantor does not warrant against title defects or claims arising prior to their ownership.

Key Features:

  1. Limited Warranty: The grantor only assures that the property was not encumbered during their period of ownership.
  2. Protection for Grantee: Provides protection against title defects caused by the grantor, but not historical defects.
  3. Common Use: Often used in commercial property transactions or foreclosures.

Examples:

  • Commercial Property Purchase: A company buys an office building using a Special Warranty Deed; the seller guarantees the title only for the duration of their ownership, not for prior owners.
  • Foreclosure Sale: Properties purchased through foreclosure often come with Special Warranty Deeds due to the limited guarantee from the entity handling the foreclosure.

Frequently Asked Questions (FAQs):

Q1: What is the main difference between a Special Warranty Deed and a General Warranty Deed?

  • A1: A General Warranty Deed provides a full guarantee against any defects in title, while a Special Warranty Deed only covers defects occurring during the grantor’s ownership period.

Q2: When is a Special Warranty Deed typically used?

  • A2: It is commonly used in commercial real estate transactions, foreclosures, and situations where the property’s title history is complex and uncertain.

Q3: Why would a buyer accept a Special Warranty Deed?

  • A3: The buyer might accept such a deed if additional title insurance is purchased, or if the property is offered at a price that accounts for the limited warranty.

Q4: Can a Special Warranty Deed protect against third-party claims?

  • A4: Only if those claims arose during the grantor’s period of ownership.

Q5: Is title insurance necessary with a Special Warranty Deed?

  • A5: Yes, title insurance is often recommended to protect against potential undiscovered title defects or prior liens.
  • General Warranty Deed: A deed in which the grantor guarantees they hold clear title to a piece of real estate and have a right to sell it. The warranty covers the property’s entire history.
  • Quitclaim Deed: A type of deed that transfers only whatever interest the grantor currently has in the property, if any, without any warranty of title.
  • Title Insurance: Insurance that protects against financial loss from defects in title to property and from the invalidity of mortgage liens.

Online References:

Suggested Books for Further Studies:

  • The Law of Property: Concepts and Insights by Thomas W. Merrill
  • Real Estate Law by Marianne Jennings
  • Fundamentals of Modern Property Law by Edward H. Rabin, Roberta Rosenthal Kwall, and Craig Allen Arnold

Fundamentals of Special Warranty Deed: Real Estate Basics Quiz

### What is covered under a Special Warranty Deed? - [x] Defects that occurred during the grantor’s period of ownership. - [ ] All title defects, regardless of when they occurred. - [ ] No warranties or guarantees at all. - [ ] Only structural defects of the property. > **Explanation:** A Special Warranty Deed covers defects that arose during the grantor's ownership period only. ### Which is a situation where a Special Warranty Deed is commonly used? - [x] Commercial property transactions - [ ] Residential first-owner purchases - [ ] Quick sales to resolve family estate matters - [x] Foreclosure sales > **Explanation:** Special Warranty Deeds are typically used in commercial transactions and foreclosure sales due to their limited warranty scope. ### How is a General Warranty Deed different from a Special Warranty Deed? - [ ] It provides no warranties at all. - [x] It guarantees against all defects in title, regardless of when they occurred. - [ ] It guarantees that the property is free from all encumbrances. - [ ] It only guarantees defects during the buyer’s period of ownership. > **Explanation:** A General Warranty Deed guarantees all defects in title irrespective of when they occurred, unlike a Special Warranty Deed which is limited to the grantor’s ownership period. ### Should buyers obtain title insurance when receiving a Special Warranty Deed? - [x] Yes, to protect against unknown title defects. - [ ] No, the deed itself provides enough protection. - [ ] It is optional but not recommended. - [ ] Only if the property is residential. > **Explanation:** Buyers should obtain title insurance when accepting a Special Warranty Deed to safeguard against any unknown title defects. ### Who provides the warranty of a Special Warranty Deed? - [ ] The grantee’s attorney - [ ] A third-party escrow company - [x] The grantor - [ ] The lender > **Explanation:** The warranty in a Special Warranty Deed is provided by the grantor. ### Which term is associated with a Special Warranty Deed due to its limited scope? - [ ] All encompassing protection - [x] Limited warranty - [ ] Zero protection principles - [ ] General warranty > **Explanation:** The term limited warranty is associated with Special Warranty Deeds due to its coverage during the grantor’s ownership period only. ### What is not protected under a Special Warranty Deed? - [ ] Claims that occurred after the grantor bought the property - [x] Claims that occurred before the grantor owned the property - [ ] Encumbrances placed by the grantor during ownership - [ ] Title defects caused by the grantee > **Explanation:** A Special Warranty Deed does not protect against title defects or claims arising before the grantor’s ownership. ### What must a grantor warrant in a Special Warranty Deed? - [x] That the property was not encumbered during their ownership - [ ] That the property was free from tax liens - [ ] That the title is free from significant legal encumbrances - [ ] That the property is in good physical condition > **Explanation:** The grantor in a Special Warranty Deed warrants that the property was not encumbered during their ownership period. ### Is a Special Warranty Deed more commonly used in commercial or residential transactions? - [x] Commercial - [ ] Residential - [ ] Equally used in both - [ ] Not used typically in any specific transactions > **Explanation:** Special Warranty Deeds are more commonly used in commercial real estate transactions than in residential ones. ### What does a Special Warranty Deed assure a grantee about the grantor? - [ ] That the grantor guarantees all previous titles - [x] That the grantor promises the title was clear during their ownership - [ ] That all future claims will be defended - [ ] That the grantor offers ongoing maintenance warranties > **Explanation:** A Special Warranty Deed assures the grantee that the title was clear from any defects during the grantor's ownership.

Thank you for exploring the nuances of Special Warranty Deeds through our detailed overview and educational quiz. Your understanding of real estate terms is an invaluable asset. Happy learning!

Wednesday, August 7, 2024
Special-Purpose Entity (SPE)
Special Situation
General Warranty Deed January 1, 1
Grantee January 1, 1
Quitclaim Deed January 1, 1
Unrecorded Deed January 1, 1
Description January 1, 1
Estate in Reversion January 1, 1
Grantor January 1, 1
Warranty Deed January 1, 1

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