Limited warranty deed

Limited warranty deed
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Limited Warranty Deed is a sort of deed where the grantor guarantees that he has clear title to piece of real property and has a right to sell it to the buyer. There are several types of deeds but the limited warranty deed is the most favorable to the seller. This kind of deed guarantees that there are no title defects—claims against the title by a creditor or anyone else—that were put in place during the time period the grantor owned the property. The deed does not offer any guarantees about the condition of the title from the time period before the grantor took ownership. There are three main types of deeds used for property transfer:

  • General warranty deeds the seller guarantees the buyer that he has the right to transfer the property. The Seller shall defend the title to the property against the claims of all persons. The seller is "seized of the fee" in the real estate."Seized of the fee" means that the seller warrants that he owns all of the rights in the real estate. There are no encumbrances against the real estate that are not listed in the deed.
  • Limited warranty deeds the seller gives only two guarantees to the buyer. First : The seller personally has not done anything to the title that the seller received. It is a very limited warranty in comparison to the broad warranty in a general warranty deed where the seller warrants that the seller not only owns the property, but also all rights in the property. Second : The seller will defend the title to the property against the claims of persons making claims based on the prior actions of the seller, but no one else. This is a much more restrictive warranty than the broad warranty in the general warranty deed where the seller warrants that the seller will defend the title against the claims from all parties.
  • Non-warranty deeds in this kind of agreement, the seller gives no warranties. Although lawyers quibble over whether there is a difference between a Non-Warranty Deed (which actually purports to convey something) and a Quitclaim Deed (which only releases any claims the grantor has in the land), they all share the same characteristic that they contain no warranty, even against the grantor's own acts. In a Non-Warranty or Quitclaim Deed, the seller merely is giving the buyer whatever rights, if any, that the seller has in the property and the seller makes no warranties of any nature about the seller's rights in the property.

What should limited warranty deeds contain?[edit]

Here are some example(R. Adams, 2016, s.2):

  • Name and address of the grantor,
  • Legal description of the property,
  • Statement that the grantor intends to convey the property to the grantee,
  • Statement that the grantor is the legal owner of the property and has the legal right to transfer the property,
  • Guarantee that there are no outstanding claims placed against the property by any creditor instituted during the grantor's ownership, with a promise of compensation by the grantor if that turns out not to be true.

Common uses of Special Warranty Deeds[edit]

Examples of use:

  • Transferring real estate to a trust—like a living trust—that the transferor controls or benefits from,
  • Transferring real estate to a business—like a limited liability company—that the transferor owns,
  • Selling commercial or multi-family residential property,
  • Transferring property to a new owner that is purchasing title insurance on the property and is not concerned with the limited warranty of title or in other circumstances where the current owner does not want to be legally responsible for problems with title that arose before the current owner owned the property.


Author: Zofia Rey