General Warranty Deed VS Special Warranty Deed

General Warranty Deed

Definition: A general warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to you. The guarantee is not limited to the time the grantor owned the property—it extends back to the property's origins.

Important portions of a general warranty deed include,

·         The grantor states there are no hidden liens or encumbrances on the property. In other words, there are no debts or holds other than those that are obvious in public records.

·         The grantor declares that he or she is the owner of the property and has a right to sell it to you.

·         The grantor guarantees that if the title ever fails he or she will compensate the grantee (new owner) for any losses.

That guarantee might or might not be helpful, because the grantor may be dead or unable to follow through on the promise if title problems are found in the future.

Most people hire someone (e.g., Title Company) to perform a title search to determine if there are title problems that must be resolved before they purchase a property. They can also purchase title insurance, which covers many types of losses that occur if problems are discovered later.

Special Warranty Deed

The special warranty deed is not nearly as protective of the buyer as is the general warranty deed. The grantor of a special warranty deed conveys the property with two warranties:

·  The grantor warrants that they have received title.

·  the grantor warrants, unless noted specifically in the deed, that the property was not encumbered during their period of ownership.

The grantor of the special warranty deed, in effect, only warrants the title against their own actions or omissions. They warrant nothing prior to their taking title. If specifically stated in the deed, other warranties can be conveyed. Special warranty deeds are frequently used by executors and trustees.