Warranty and Property Deeds

Property ownership and the liens or encumbrances that may accompany them have become increasingly complex in today’s litigious society.  That is why it has become common practice that, in a property sale, the purchaser desires a stronger guarantee that they will have sole claim to the property.  The stronger that guarantee, the more secure the new owners claim will be.   There are three or four types of deeds that can be granted in a property sale, depending on the state and the circumstances, but the warranty deed is the strongest.

Types of Property Deeds   

The three or four types of property deeds are common in different parts of the country and apply to different circumstances.  There are also different state laws that apply across the country, so it is important to consult an attorney to learn which property deeds are appropriate for your transaction.

• General Warranty Deed – generally used in the Midwest and Eastern states but accepted throughout the country.  This deed guarantees three things:
  
  1. That the property has not been sold to another party and that he has the right of conveyance, the right to transfer that property to another party
  2. That the property has no encumbrances or liens against it
  3. That the property owner, or seller, guarantees that the title is free and clear and will defend the title if it is called into question by a third party

• Grant Deed – is common in California.  It carries the first two warranties that the Warranty Deed does, but does not guarantee to defend the title if it is challenged by a third party.
• Quitclaim Deed – this is the simplest warranty and the one with the lowest level of security.  This deed merely transfers title from the seller to the purchaser.  It does not guarantee that the seller has sole claim to the property.  This deed is generally granted in a divorce where one spouse transfers their portion of ownership of the property to the other.  However, a quitclaim deed does not, in itself, relieve someone’s responsibility for a mortgage for which they are a signer.  
• Special Warranty Deed – only guarantees that the seller has sole current title to the property and they have no liens or encumbrances, but does not guarantee that no one else has an interest in the property.
• In some instances a transfer of property ownership is transferred by a deed without warranty.  This deed promises that the seller has title to the property, but it provides no guarantee that no third party may appear with an interest in the property, nor does it promise to defend the title of the property.

Advantage of a Warranty Deed

The greatest advantage of the warranty deed is that the grantor of the warranty deed will defend title to the property if it is challenged an no other deed will do so.  This provides an extra level of security for the property that can be a great advantage to most buyers.

With the variety of deeds and transfers of property available in today’s complicated world, making sure you have the right deed for a transfer of property can be difficult.  Real estate lawyers have the experience and expertise to help you discover which deed is right for you.  Making the right decision can make a big difference in how, and whether, a real estate transaction is completed, and whether it will stand the test of time.