Special Warranty Deed
A special warranty deed is a deed where the grantor only guarantees clear title for the period they owned the property, not for the entire history of ownership, providing less protection than a general warranty deed.
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Exam Tip
Special warranty = LIMITED protection. Only covers grantor's ownership period. General warranty = FULL chain of title protection.
What is a Special Warranty Deed?
A special warranty deed (also called a limited warranty deed in some states) is a legal document used to transfer property ownership where the seller only guarantees that no title defects arose during their ownership period. Unlike a general warranty deed, it does not warrant against problems that existed before the seller acquired the property.
Special Warranty Deed Guarantees
The grantor (seller) warrants only that:
| Warranty | Coverage |
|---|---|
| No encumbrances during ownership | Seller created no liens or encumbrances |
| No title claims during ownership | Seller defended against any claims |
| Quiet possession during ownership | Buyer won't be disturbed by seller's actions |
What is NOT Covered
| Not Warranted | Meaning |
|---|---|
| Prior encumbrances | Liens or claims from before seller's ownership |
| Prior title defects | Problems in chain of title before seller |
| Other parties' actions | Claims from third parties before seller owned property |
General vs. Special Warranty Deed
| Feature | General Warranty Deed | Special Warranty Deed |
|---|---|---|
| Coverage Period | Entire property history | Only during grantor's ownership |
| Protection Level | Maximum | Limited |
| Seller Liability | For all title defects | Only defects from their ownership |
| Common Use | Residential sales | Commercial, bank sales, estates |
| Buyer Risk | Lower | Higher |
When Special Warranty Deeds Are Used
| Situation | Why |
|---|---|
| Foreclosure sales | Banks don't know property history |
| Estate sales | Executors can't warrant past history |
| Commercial transactions | Parties negotiate title insurance |
| Short sales | Sellers can't guarantee prior owners' actions |
| Corporate transfers | Between related entities |
Protection Strategies for Buyers
| Strategy | Purpose |
|---|---|
| Title search | Discover existing defects |
| Title insurance | Protect against unknown claims |
| Survey | Identify boundary issues |
| Careful review | Understand what's not covered |
Deed Comparison Chart
| Deed Type | Protection Level | When Used |
|---|---|---|
| General Warranty | Highest | Most residential sales |
| Special Warranty | Limited | Commercial, foreclosures |
| Quitclaim | None | Family transfers, clearing title |
| Bargain and Sale | Varies | Tax sales, foreclosures |
Exam Alert
Special warranty deed only warrants title for the GRANTOR'S period of ownership. It does NOT protect against defects that existed before the seller acquired the property. Buyers should obtain title insurance for additional protection.
Study This Term In
Related Terms
Warranty Deed
A warranty deed is a type of deed that provides the highest level of protection for the buyer, with the grantor guaranteeing clear title and promising to defend against any claims to the property.
Quitclaim Deed
A quitclaim deed is a legal document that transfers whatever ownership interest the grantor may have in a property without any warranties or guarantees about the quality of title, offering the least protection to the buyer.
Title Insurance
Title insurance is a policy that protects property buyers and lenders against losses from defects in title, such as liens, encumbrances, or ownership disputes that existed before purchase.
Encumbrance
An encumbrance is any claim, lien, or liability attached to real property that may diminish its value or affect the owner's ability to transfer clear title.
Chain of Title
Chain of title is the complete, sequential history of all transfers of property ownership from the original owner to the present owner, used to verify clear and marketable title.
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