What is a Warranty Deed? 4 Types & What They Do Explained

What is a warranty deed?

If you are buying, selling, or otherwise involved in the transfer of property then you will need to execute a deed. For most residential and commercial real properties, you will want to know what is a warranty deed along with an understanding of other types of warranty deeds.

Below, we explain the different types of warranty deeds, their benefits, and other important considerations.

What Is a Warranty Deed? Our Definition

Our warranty deed definition is simple. It is a record that reflects the transfer of real property from one party to another and where the transferor provides certain promises (i.e., warranties) about the property. It includes a legal description of the property along with other important information like the names of the parties. The warranty deed meaning will vary with each type of real estate transaction depending on the specific type of warranty deed used and the nature of the parties. As an example, you may consider the corporate warranty deed form that we explain in the next section.

What Is a Corporate Warranty Deed?

As mentioned above, a warranty deed is an instrument conveying real estate between two parties. When one of those parties is a corporation, a corporate warranty deed is an appropriate form for recording the transaction. There are special rules when it comes to executing corporate warranty deeds that relate to authority and cases of fraud.

What Is a Warranty Deed Sale?

Most instances where you need a warranty deed will be in situations between a buyer and seller of real property. This may be known as a warranty deed sale where the seller is the grantor and the buyer is the grantee. The recorded deed is just one part of a transaction that will usually include a sale contract, title reports, disclosures, and other documentation to ensure a smooth closing.

What Are the Four Types of Warranty Deeds?

Parties that want to record the conveyance of real estate can do so using one of several types of warranty deeds. There are four main types of deeds (warranty, special warranty, a deed without warranty, and quitclaim) along with other specialty deeds like a corporate warranty deed under real estate law.

What Is a General Warranty Deed in Real Estate?

A general warranty deed is a widely recognized and used deed form that most parties use in residential real estate deals and other cases. The general warranty deed contains several covenants of title that provide additional assurances to the buyer or grantee about the purchased property. Primarily, they include:

  • A covenant of general warranty: The grantor’s promise to protect the buyer from harms that result because of title defects (i.e., conflicts over the rightful ownership of the land).
  • A covenant of seisin: A promise from the seller that they are the owner of the property.
  • A covenant of the right to convey: The seller’s promise that they have the legal right and authority to transfer the property to the buyer.
  • A covenant against encumbrances: A promise that no other undisclosed restrictions exist on the property such as an easement, outstanding lien, judgment, or another arrangement.
  • A covenant of quiet enjoyment: The grantor’s promise that no defect in title with the property will impact the grantee.

What Is the Purpose of a General Warranty Deed?

The purpose of a general warranty deed is to provide the party receiving the property with the highest level of protection about the current title status of the property and their ability to legally obtain it from the grantor. Furthermore, the general warranty deed gives the homebuyer recourse against the seller through associated statutory and common law rights in the event of a title defect. When title conflicts do arise between a buyer and seller, real estate mediation may be an appropriate forum to settle the dispute.

What Is a Special Warranty Deed?

Second to a general warranty deed, a special warranty deed offers the greatest assurance to buyers about the title and the seller’s authority to transfer the property. However, the nature of the covenants a grantor makes under a special warranty is more limited. The special warranty only applies to the grantor’s period of ownership. In other words, the seller is only making promises about the property’s condition from the moment they received it, which excludes title defects or other issues that may exist from previous owners.

Special warranty deeds are common in situations where the current owner is unsure about the property’s history and prior chain of title. An example would be transactions involving property bought through foreclosure or as part of a bankruptcy proceeding.

What Is the Purpose of a Special Warranty Deed?

The purpose of a special warranty deed is to provide covenants limited to the grantor’s ownership of the property. This insulates the current owner from any title defects or issues with the real estate that happened before the current owner took possession.

What Is a Deed Without Warranty?

As the name implies, a deed without warranty is one where the seller conveys a fee simple title but makes no promises or guarantees held under a general or special warranty deed. Sometimes, you will hear a deed without a warranty called a fee simple deed. A complete title search from a title company is especially important in executing a deed without a warranty to spot potential title defects.

What Is the Purpose of a Deed Without Warranty?

The purpose of a deed without warranty is to convey property outright without any additional protections to the buyer about receiving the property with clear title. In other words, title defects may exist on the property and the buyer is taking ownership while assuming that risk. This risk may materialize in the form of third-party claims about rightful ownership.

What Is a Quitclaim Deed?

A quitclaim deed provides the least amount of assurance to a buyer because this type of deed only acknowledges the grantor’s relinquishing of their interest in the title to the grantee. Regardless of whether the grantor has any such title interest at all.

What Is the Purpose of a Quitclaim Deed?

The purpose of a quitclaim deed is less about transferring rightful ownership from one party to another and more so about establishing a record of one party disclaiming their potential or actual title interest in a piece of real estate. Often, you will use this deed type as part of a quiet title action case.

Special Warranty Deed vs General Warranty Deed

When it comes to choosing between a general warranty deed vs special warranty deed, the choice often reflects how the parties agree to allocate risk between each other. Remember, the difference between special warranty deed and general warranty deed use is that the covenants regarding title only apply to the current owner with a special warranty deed.

As a result, a special warranty deed will usually be preferable when you are the seller, and a general warranty deed will provide greater benefit if you are a buyer. However, business standards may necessitate the use of one warranty deed type over another even if doesn’t provide the best benefit. If you are transferring property without using a general warranty deed, your real estate due diligence may benefit from greater thoroughness.

How Much Does a Warranty Deed Cost?

The cost of preparing, executing, and recording a warranty deed will vary based on the property transaction, its value, and where it’s located. Generally, these costs include the following parts:

  • Costs for attorneys fees to prepare the deed (usually this cost will vary based on the billing rate and complexity of the real estate’s title chain)
  • Filing fees to record the deed instrument with the county clerk (amounts will vary based on the county)
  • State tax for documentary stamps for the conveyance (rated at $.70 per $100 of the property’s value)

Need Help with a Warranty Deed?

A real estate attorney from Cueto Law Group can help you when it comes to structuring the transfer of real estate whether for personal or business purposes. We offer guidance on the appropriate warranty deed type to use and help clients understand related rights and risks related to the transfer under warrany deed Florida law. If you have any questions or need legal advice about warranty deeds in, please consider a consultation with our office.

Speak with an attorney at Cueto Law Group today.

FAQs

Who Signs a Warranty Deed?

The parties that sign a warranty deed usually include the grantor and the grantee, in addition to a notary acknowledgment. These parties can be individuals or authorized representatives for a corporation, partnership, limited liability company, trustee, etc. You may also have a signature or stamp from the applicable county clerk.

Which Type of Deed Offers a Purchaser the Least Protection?

A quitclaim deed offers purchasers the least amount of protection because it does not provide guarantees that the seller is the rightful owner and has the authority to transfer. Rather, the quitclaim deed evidences the grantor’s relinquishing right to the title. The no warranty deed also provides little protection.

Does a Warranty Deed Transfer Ownership?

Yes, a warranty deed transfers ownership of real estate from one party to another. However, the deed is an instrument recorded in the county where the property is located. You may also have other legal documents to execute the transfer such as a sale contract, trust, etc.

Does a Warranty Deed Prove Ownership?

A warranty deed generally provides strong evidence of ownership, especially in cases that have a clear title. However, title issues may weaken the strength of a warranty deed when it comes to proving ownership if the grantor executed the deed improperly or if other parties dispute the title.

Is the Warranty Deed the Same as the Title?

The warranty deed is one type of recording instrument that reflects property title, which is the ownership of a property. The warranty deed is just one type of property deed and other types can provide property transfers from one party to another, but with varying warranty deed guarantees.

Is a Warranty Deed the Same as a Deed?

Sort of. A deed is a broad category of legal documents that provide public records about the ownership of a piece of real estate. The deed describes the property along with other legal language. While all warranty deeds are deeds, not all deeds are warranty deeds.