A Warranty Deed offers protection to the buyer because the seller affirms that he or she legally owns the piece of property and that there are no encumbrances against the property.
The Warranty Deed is also a guarantee of title and offers the buyer protection in the form of holding the seller liable for any damages if the title is not free and clear of any claims.
There are Two Types of Warranty Deeds
A General Warranty Deed is a deed promising that the grantor, or seller, has a good title free and clear of all liens and encumbrances and will defend the grantee, or buyer, against all claims that may arise.
A Special Warranty Deed provides that the seller has not done anything to cause problems with the title to the property during the period of his or her ownership.
Both General Warranty Deeds and Special Warranty Deeds offer the following guarantees to the buyer:
- The seller owns the title.
- The seller can sell the property legally.
- The property has not been sold by the seller.
- The property is free and clear of all claims.
- The seller is responsible for any problems with the property.
However, there are distinct differences between a General Warranty Deed and a Special Warranty Deed and one or the other should be preferred whether you are the buyer or the seller.
Difference Between General Warranty Deed and Special Warranty Deed
- A buyer should request a General Warranty Deed because it offers the buyer the utmost protection. A General Warranty Deed assures clear title all the way back to the origin of the property. By using a General Warranty Deed, the buyer can seek recourse against the seller after the transaction is completed.
- A buyer must purchase title insurance when extended a Special Warranty Deed to assure that that the title of the property is clear.
- A seller using a General Warranty Deed is required to defend the title against all claims and compensate the buyer for any encumbrances.
- The seller in a Special Warranty Deed is only responsible for problems that occurred during his ownership of the property.
Remember, a General Warranty Deed covers claims over the entire history of the property. A Special Warranty Deed only covers the time that the seller owned the property.