To legally transfer property ownership to a new owner, a warranty deed is employed.

There are different warranty deed kinds with varying degrees of protection for the Grantee, and each state has its own unique warranty deed form.

What is a Warranty Deed?

A Warranty Deed is a legal document used in real estate transactions to transfer ownership of a property (real property or real estate) from one party to another. It provides a guarantee or warranty by the seller (grantor) that they have clear and marketable title to the property and that the property is free from any encumbrances or defects in title. In other words, it assures the buyer (grantee) that the property is being transferred with a clean and clear title.

Here are key features and components of a Warranty Deed:

1. Grantor and Grantee: The Warranty Deed identifies the grantor (seller) and the grantee (buyer). It specifies who is transferring ownership and who is receiving it.

2. Property Description: The deed includes a detailed legal description of the property being transferred. This description is typically based on survey measurements and recorded documents.

3. Covenant of Seisin: The grantor covenants that they have legal ownership and possession of the property and have the authority to transfer it.

4. Covenant Against Encumbrances: The grantor assures that the property is free from liens, mortgages, easements, or other encumbrances, except those specifically mentioned in the deed.

5. Covenant of Quiet Enjoyment: The grantor guarantees that the grantee will not be disturbed in their possession of the property due to any claims of ownership or title issues arising from the actions of the grantor.

6. Covenant of Warranty Forever: This covenant implies that the grantor will defend the title against any lawful claims and compensate the grantee for any losses suffered due to defective title.

7. Execution and Acknowledgment: The Warranty Deed must be signed by the grantor and acknowledged before a notary public or other authorized official to make it legally valid.

8. Delivery and Acceptance: The deed must be delivered by the grantor and accepted by the grantee to complete the transfer of ownership.

Warranty Deeds are commonly used in real estate transactions when the seller wants to provide the highest level of assurance to the buyer regarding the property's title. This type of deed is often used in residential and commercial property sales.

It's important to note that while Warranty Deeds offer strong assurances to the buyer, they also expose the seller to potential legal liability if any title issues or encumbrances arise after the sale. Therefore, it's essential for both parties to conduct thorough due diligence and, if needed, obtain title insurance to protect against unforeseen title defects.

What is the use of a Warranty Deed?

The primary use of a Warranty Deed in a real estate transaction is to transfer ownership of a property (real property or real estate) from the seller (grantor) to the buyer (grantee) while providing a guarantee or warranty by the seller regarding the property's title and condition. Here are the key uses and benefits of a Warranty Deed:

1. Transfer of Ownership: A Warranty Deed is a legal instrument used to convey real property from one party to another. It documents the change in ownership, officially transferring the property rights from the seller to the buyer.

2. Title Assurance: The Warranty Deed contains covenants or promises made by the seller, which provide assurances to the buyer about the quality of the property's title. These covenants typically include guarantees that the seller has clear and marketable title to the property.

3. Defect-Free Title: By using a Warranty Deed, the seller asserts that there are no undisclosed defects in the title that could affect the buyer's ownership rights. It ensures that the property is free from encumbrances, liens, or claims against the title that were not disclosed to the buyer.

4. Protection for the Buyer: The Warranty Deed is designed to protect the buyer's interests in the transaction. If any title issues or claims arise after the sale that were not disclosed by the seller, the buyer has legal recourse against the seller based on the warranties in the deed.

5. Financing and Mortgages: Many lenders and financial institutions require a Warranty Deed as part of the mortgage and financing process. It provides them with assurance that their investment is protected by a clear title.

6. Residential and Commercial Transactions: Warranty Deeds are commonly used in both residential and commercial real estate transactions. They are a standard practice in many property sales.

7. Legal Enforceability: Warranty Deeds are legally enforceable documents. If the seller fails to fulfill the warranties provided in the deed, the buyer can take legal action to seek remedies, such as financial compensation.

8. Clear Ownership History: The use of a Warranty Deed helps establish a clear ownership history for the property, which can be important for future sales or refinancing.

9. Title Insurance: In conjunction with a Warranty Deed, buyers often purchase title insurance to further protect themselves against potential title defects or issues that may arise after the sale.

It's important to note that while Warranty Deeds provide strong assurances to the buyer, they also impose a higher level of legal responsibility on the seller. Sellers using a Warranty Deed should be confident in the quality of the property's title and be prepared to defend against any title claims or issues that may arise after the sale. As such, due diligence and, in some cases, the purchase of title insurance are essential steps in a real estate transaction involving a Warranty Deed.

Do Warranty Deeds Establish Ownership?

Absolutely not. A warranty deed serves as the Grantor's sworn statement that they, to the best of their knowledge, are the property's legal owners and plan to transfer ownership to you, the Grantee.

Even though grantors have acknowledged an affidavit of title, they might not be aware of claims made against the title to a piece of land.

If you learn that the property you bought is subject to debt or other liens (i.e., a claim someone else has on a piece of property), you might not have any recourse without a warranty deed. Most likely, the Grantor lacked the legal right to sell the property.

However, if you have a warranty deed, you have the legal right to recover damages (i.e., monetary compensation) as one of your primary legal options.

Consider employing a different kind of deed if a warranty deed is insufficient for your needs. There are six regularly used deeds; each has a specific purpose and provides differing degrees of security when selling or transferring real estate or land.

Warranty Deed Types

An essential step in the real estate transaction is the transfer of property ownership from the seller to the buyer through a warranty deed. The seller guarantees they have the authority to transfer the property and that there are no hidden liens, which safeguards the new owner.

The new owner of the property can hold the seller accountable if the title is flawed since the seller is legally compelled to disclose any liens or encumbrances.

A warranty deed entails the seller making these disclosures and guaranteeing the absence of liens and encumbrances on the property.

Easements, usage limitations, tax liens, and court orders are examples of common encumbrances.

The sort of warranty deed you employ will depend on the type of property and its legal status. The degree of protection offered to the integrity or soundness of the property's title varies depending on the kind.

Deed of General Warranty
An official document used to transfer real estate ownership is a general warranty deed. It ensures that the title to the property is guaranteed against all potential flaws, including those that a Grantor is not at fault for creating.

By guaranteeing the full property history, including the time before and after the Grantor had the land, it specifically provides the Grantee with extra protection.

Because it offers the greatest level of legal protection, it is frequently utilized when a grantee pays for a piece of property.

Because it offers the greatest level of legal protection, it is frequently utilized when a grantee pays for a piece of property. The typical document used in real estate transactions is a general warranty deed. It guarantees that there are no liens or encumbrances on the property as it transfers ownership of real property from one person or entity to another.

Deeds with general warranties guarantee that the seller has the right to transfer the property and that it is cleared of all liens and encumbrances. The seller undertakes to pay the buyer compensation if any liens or encumbrances are discovered after the ownership transfer.

Legal Warranty Deed
A statutory warranty deed is a condensed general warranty deed that bases the promises it offers the customer on state legislation.

You might not be able to use statutory warranty deeds in your state because some states do not have laws establishing them.

The safeguards, though, are the same as those found in a standard warranty deed.

Deed of Special Warranty
A special warranty deed, commonly referred to as a limited warranty deed, is a legal document that provides coverage against title issues for the time that the grantor owned the property.

It is often utilized when the seller wants to avoid being held accountable for claims made against the title during or after their ownership of the property.

Such accusations would need you to defend your ownership in court.

This deed only covers the time the current seller owned the property, not that the title is completely free of any encumbrances and debts. It excludes any responsibility for liens or encumbrances that existed before the seller purchased the property.

The same details are included in a special warranty deed as they are in a regular warranty deed. It ensures that the seller is the current owner of the property and has the right to sell it.

It will not contain a clause acknowledging responsibility for any prior liens.

The warranty only addresses title problems brought on by the most recent owner if you sign a specific warranty deed when buying a house with numerous prior owners. It is not covered by a specific warranty deed if there were issues with the other former owners.

Therefore, if a previous owner didn't pay their property taxes and a lien was therefore put on the property, you might be responsible for those unpaid taxes.

It is best to speak with a real estate attorney, whether you are the buyer or the seller, to ascertain whether a special warranty deed is in your best interests.

Warranty Deed Sample

The level of security provided by warranty deeds to the grantor and grantee varies by state.

Here are examples of the two primary types of warranty deeds:

General Warranty Deed Sample

Below is an example of a general warranty deed.

Special Warranty Deed Sample

The following is an example of a special warranty deed.