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What is a Special Warranty Deed and How is it Used?

what is a warranty deed

A Special Warranty Deed in Florida is a type of deed used in real estate transactions where the grantor (seller) only guarantees that the property being transferred was not encumbered during their ownership. This type of deed provides less protection for the grantee (buyer) than a General Warranty Deed, as it only warrants against defects that arose during the grantor’s ownership, rather than any defects that may exist on the property. It’s also called a “limited warranty deed” in some states.

Define: Special Warranty Deed is a type of deed used in a real estate transaction where the grantor (the seller) only guarantees that the property being transferred was not encumbered during their ownership.

When To Use a Special Warranty Deed?

A Special Warranty Deed is typically used when the grantor has only recently acquired the property and is not able to provide a full warranty of the property’s condition. It is also commonly used in commercial real estate transactions, where the buyer is aware of the property’s condition and does not require a full warranty from the seller. Additionally, it’s used when the property has been foreclosed, and the grantor (bank) has only held the title for a short period of time. It is also used when the property is being sold “as is” and the grantor does not want to assume responsibility for any defects that may exist.

How Does a Special Warranty Deed Work?

Special warranties have been used in residential real estate transactions. Often the sale of residential properties involving individual family homes is done with general warranties deeds. Many banks insist on using general warranties documents to make mortgage loans. Special warranties are often called covenant deeds, grant deeds or limited warrants in a number of state names. It covers only the duration during which the seller had ownership of the property in a warranty deed of sale. Special warranties are enforceable against a misprint on a clear title that may have existed before its purchase or sale.

Special Warranty Deed Guarantees

A special warranty deed in Florida is a legal document used in real estate transactions that provides limited guarantees regarding the title of the property. Unlike a general warranty deed, which offers comprehensive protection, a special warranty deed guarantees that the seller only warrants against any title issues or defects that occurred during their ownership of the property. It does not cover any potential issues that may have existed before the seller acquired the property. Understanding the implications of a special warranty deed is crucial when buying or selling real estate in Florida. For expert assistance and guidance, contact us at 561-838-9595 or hello@newpathtitle.com.

Purpose of Special Warranty Deed

The warranty act is intended for the transfer from the previous owner to the newly established owner. This product has specific guarantees from the seller. Among the guarantees the buyer gives are the right to keep the property in the hands if he or she wishes to transfer the property. This Special Warranty Act is intended to limit the warranties provided to the seller in relation to matters which have occurred only after the seller has owned the property. In this context, they are sometimes also called limited warranty deeds.

What is a General Warranty Deed?

A General Warranty Deed is a legal document used in real estate transactions to transfer ownership of a property from the grantor (seller) to the grantee (buyer). It includes guarantees or warranties from the grantor regarding the property’s condition and ownership. These warranties provide the grantee with protection against any defects or issues that may exist on the property, even if they were not discovered during the title search process.

A General Warranty Deed includes several different types of warranties, such as:

  • Covenant of seisin: This warranty guarantees that the grantor is the rightful owner of the property and has the legal right to sell it.
  • Covenant of right to convey: This warranty guarantees that the grantor has the legal right to convey the property and that it is free from any encumbrances or liens.
  • Covenant against encumbrances: This warranty guarantees that the property is free from any encumbrances or liens that may affect the grantee’s use or ownership of the property.
  • Covenant for quiet enjoyment: This warranty guarantees that the grantee will be able to peacefully enjoy the property without any interference from others claiming a right to the property.
  • Covenant for further assurances: This warranty guarantees that the grantor will take any additional steps necessary to perfect the grantee’s title to the property.

A General Warranty Deed is considered as a highest standard of protection and it is commonly used in residential real estate transactions, as the buyer can have confidence that the property is free from any defects or issues that may affect the property’s value or use.

Similarities between General Warranty Deeds and Special Warranty Deeds:

Both General Warranty Deeds and Special Warranty Deeds are legal documents used to transfer ownership of a property from the grantor (seller) to the grantee (buyer). Both types of deeds include warranties or guarantees from the grantor regarding the property’s condition and ownership.

One similarity between the two types of deeds is that they both provide some level of protection for the buyer against any defects or issues that may exist on the property. In a General Warranty Deed, the grantor provides a higher level of protection by warranting against any defects that may exist on the property, even if they were not discovered during the title search process. In a Special Warranty Deed, the grantor only warrants against defects that arose during their ownership of the property.

Another similarity between the two types of deeds is that purchasing title insurance can help to reduce the risks associated with both types of deeds. Title insurance provides coverage for any defects in the title that may exist on the property, even if they were not discovered during the title search process. This can provide additional protection for the buyer, especially in situations where the property has been foreclosed or is being sold “as-is.”

However, there are also some key differences between General Warranty Deeds and Special Warranty Deeds. General Warranty Deeds are considered as the highest standard of protection and are commonly used in residential real estate transactions, while Special Warranty Deeds provide limited protection and are often used in commercial real estate transactions or when the property has been foreclosed or is being sold “as-is.” Additionally, special warranty contracts do not frequently apply to residential homes, as they are mostly used for repossessed or short-listed properties.

Example of Special Warranty Deed

Although general warranty deeds are common for residential property transactions, a special warranty deed is now the norm. It is primarily aimed at repossessed or short-listed properties. Most federal housing units are sold via this type of deed. One of the major reasons why a company uses special warranties is because it does not have an intention to be liable for a situation in which property was confiscated or sold.

What should be included in a special warranty document?

All types of deeds must contain this information in order to be legal: The following is an example. Joaquin will not claim title to his property until June 11, 2011, when he transfers it with a warranty certificate to Mae. He doesn’t say the exact date before this, but Mae is buying or accepting the property knowing that if any claims were brought against a title before September 11, 2011.

How a Special Warranty Deed differs from Other Deeds?

Specified guarantees have defining elements such that the grantor has no claims for a particular property during any period during which they have been issued. Compare.

The Importance of Title Insurance Company in Real Estate Transactions with Warranty Deeds.

Title insurance companies helps to protect the buyer in a real estate transaction by providing coverage for any defects in the title that may exist on the property. A title defect is any issue that affects the ownership or use of a property, such as liens, encumbrances, or disputes over ownership. When a buyer purchases title insurance, they are protected against any claims or legal actions that may arise from these defects, even if they were not discovered during the title search process.

When it comes to warranty deeds, title insurance can provide additional protection for the buyer. A warranty deed is a legal document that transfers ownership of a property and includes guarantees from the seller about the property’s condition and ownership. However, even with a warranty deed, there is always a risk of unknown title defects that could have existed before the seller’s ownership. Title insurance can help to protect the buyer against these risks by providing coverage for any defects that may have existed before the warranty deed was executed.

For example, if a property is sold with a special warranty deed and the buyer discovers a lien on the property that existed before the seller’s ownership, the title insurance policy would provide coverage for the legal expenses associated with resolving the lien and protecting the buyer’s title to the property.

Title insurance also provides coverage for any claims that may arise from a defect in the title, even if the defect is not discovered until after the sale has closed. This means that the buyer is protected from any financial losses that may result from the defect, such as legal expenses or the cost of re-selling the property.

In summary, title insurance helps to protect the buyer in a real estate transaction by providing coverage for any defects in the title that may exist on the property, even if they were not discovered during the title search process. When combined with a warranty deed, title insurance can provide additional protection for the buyer against any unknown title defects that could have existed before the seller’s ownership and also provides coverage for any claims that may arise from a defect in the title, even if the defect is not discovered until after the sale has closed.

Frequently Asked Questions

Is a special warranty deed OK?

A special warranty document gives the purchaser a little protection on the title but does not provide full protection. However, this kind of deed is accepted if another protection is provided. You can find an appropriate form online by examining your state’s name.

What may be a reason that a special warranty deed is being issued for this transaction?

A specific warranty agreement provides that the grantor guarantees that the property will not be subject unless secured. There is no assurance of issues that could result from alleged actions of previous owners.

What is the most common type of warranty deed?

Generally, warranties and deeds are common types of deeds that transfer ownership of simple property. The general warranty deeds do not validate the ownership of the grantor and are valid for sale without the consent of any other party.

What is a special warranty deed in Florida?

In Florida a special warranty decree transfers to the granting party a fee simple title guarantee that is limited by acts by the grantor. Special warrant deeds are special forms of deeds traditionally used for commercial property transactions.

What might also be called a limited warranty deed?

Limited warranties are sometimes called specific warranty deeds or special warranties. Sometimes Limited Warranty Deeds are named after Grantor such as a ‘Trustee’ Deed and/or an “Executed” Deed.

What is another name for a warranty deed?

A warranty deed or general warranty deed is a legal contract between the buyers and the sellers (grantors).

Which type of deed provides the best protection to the buyer?

A warranty deed is a legal document protecting the purchaser and making sure the seller has a clear ownership interest and has no outstanding lien or mortgage.

What is a quit claim deed?

A Quitclaim Deed, also known as a “quitclaim conveyance” or “quitclaim instrument”, is a legal document used to transfer ownership of a property from one person (the grantor) to another (the grantee). It is different from a warranty deed, as it does not include any guarantees or warranties about the property’s condition or ownership.

With a Quitclaim Deed, the grantor is only transferring whatever interest or rights they have in the property to the grantee, if any. They are not making any promises or guarantees about the property’s condition or whether there are any liens or encumbrances on the property. This means that the grantee may not have clear title to the property and may be taking on any risks associated with the property’s condition or ownership.

Quitclaim Deeds are often used in situations where the grantor is not sure of their interest in the property or if they want to transfer ownership quickly without going through the process of researching the property’s title or condition. They are often used in situations like family transfers of property, divorce or settling of estates.
It is important to note that a Quitclaim Deed does not provide the same level of protection as a warranty deed and it is not recommended to use in situations where the grantee wants to have a clear title to the property or wants protection against any defects or issues that may exist on the property.

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