Special warranty deed
|Special warranty deed|
Special warranty deed is used during transfer of ownership of the real estate property. The transfer comes with guarantees by the seller that the property is free and clear of claims. General warranty deed is the most used document in that case. The special warranty deed is used if the warranty is only for the period when seller held title to the property. If any claims existed before the seller bought the property, there is no guarantee for them.Special warranty deeds are used rather by commercial property owners who often buy and sell properties. In case ofresidential property most often general warranty deed is used, asit is safer for buyer. In obvious cases this kind of deeds are seldom used in transactions involving real estates between strangers (J. Kimmons 2018).
General warranty deed
General warranty deed can be specified as a norm in other words, how the property transfer takes place in the USA. Kind of deed such as this one gives the buyer a guarantee that the right to ownership is free from obstructions. Moreover, this right to ownership won't be a matter of unsettled legal operations and neither problems of titles. The general warranty deed gives the buyer all privileges of ownership and right to control. To be sure that buyers won't stand up with challenges related to titles, they should check if specific property has unbroken chain related to general warranty deeds reaching far into the past. The future owners won't have any challenges connected with title which chows the chain of deeds. The buyer purchasing under the general warranty deeds has guaranteed that vendor is obligated to defend the real estate agent's title in relation to everyone's claims. Moreover, the vendor has the right to transfer the property and it is warranted that the seller has all rights to the property (General vs. Special Warranty Deed 2018).
Special Warranty vs. General Warranty Deeds
The special warranty deed is in fact the transformation of the general warranty deed but it doesn't mean that it's somehow better. When it comes to general warranty deeds the warrantor ensure the general guarantee. The grantor gives a guarantee that there ane no claims or burdens in relation to property. Not even one was created over his ownership moreover the property was characterized by the clear title when it was bought. While the special warranty deed guarantees that the real estate was free and transparent for a confined time. This is not a popular way wherefore the real estate can be transferred. However, a special warranty deed doesn't have to be restricted by to two warranty. Different guarantees can be transferred only if they are directly identified in the deed and both kinds warrantee that the vendor has a title and is able to freely sell the real estate (J. Kimmons 2018).
"Both types of Warranty Deeds (Special and General) guarantee the buyer (F. Goodwill 2018):
- That the seller owns the title
- That the seller is legally allowed to sell the property
- That the property has not already been sold
- That the property is free of debt or other claims (aside any mentioned in the deed)
- That the seller is responsible for any problems/faults with the property"
Examples of Special warranty deed
- A Special Warranty Deed is an agreement between two parties, the Grantor and the Grantee, that involves the transfer of land or property from one party to the other. The Grantor guarantees that there are no claims against the property during the time that he or she held title to it. For example, if the Grantor sold the property to the Grantee with a Special Warranty Deed and it was later discovered that the title had been encumbered by another party, the Grantor would be held liable for the claim.
- A Special Warranty Deed is often used in commercial real estate transactions, such as when a company is buying a large piece of land or property. The company will want to make sure that they are protected from any claims that existed when the seller purchased the property. By using a Special Warranty Deed, the seller can guarantee that the property is free and clear of any claims during the time they held title to it.
- Another example of a Special Warranty Deed is when an owner of a business is transferring ownership of the property to a new owner. In this case, the original owner would want to make sure that the property is free and clear of any claims that may have been made against it during the time they held title. By using a Special Warranty Deed, the original owner can guarantee that the new owner is not liable for any claims that existed before they purchased the property.
Advantages of Special warranty deed
A special warranty deed offers several advantages over other forms of transferring title to a property. These include:
- Clear chain of title: A special warranty deed clearly states the chain of title of the property, meaning it shows who owned the property before the current owner and who is now transferring the title. This ensures that the buyer is getting a property with a clear title and that the seller is legally allowed to transfer the title.
- Limited warranties: Special warranty deeds contain limited warranties, meaning that the seller can only guarantee that the property has been clear of any claims or encumbrances during the time they owned the property. This limits the buyer's legal liability if any claims have been made against the property prior to the seller's ownership.
- Fewer restrictions: Special warranty deeds do not contain the same level of restrictions that other deeds do, making them easier to execute. This allows the buyer to close on the property quicker and without the need for extensive paperwork.
Limitations of Special warranty deed
A special warranty deed has several limitations that must be taken into consideration when transferring ownership of real estate property:
- It does not guarantee that the property is free of claims that existed before the seller obtained title to the property. This means the buyer will not be protected from any liens or encumbrances that may have been on the property prior to the seller's ownership.
- It does not provide the same level of protection to the buyer as a general warranty deed. The seller is only responsible for claims that occurred during the time they owned the property, not before.
- Special warranty deeds are not as common as general warranty deeds, so they may be unfamiliar to some buyers and sellers. This can make the process of transferring title more complicated and time consuming.
- A special warranty deed may require additional documents in order to be legally binding. These documents can add to the complexity of the transfer process and add to the cost of the transaction.
Overall, special warranty deeds have certain limitations that should be taken into consideration when transferring ownership of real estate property. It is important to understand the implications of such a deed before entering into an agreement for a real estate transaction.
Other approaches related to special warranty deed include:
- Selling with a lease-purchase agreement - in this case the buyer rents the property and has an option to buy it in the future. The seller has a special warranty deed to protect them from any claims from previous owners.
- Partial interest transfer - this approach is used when the property is transferred in part. The buyer and the seller will have a deed of special warranty for the part that is transferred.
- Quitclaim deed - in this case the seller does not guarantee that the property is free of claims. The transfer is done with a quitclaim deed.
- Life estate - this approach is used when the property is transferred to someone for their lifetime. The deed of special warranty is used to guarantee that the property is free of claims during the lifetime of the recipient.
In summary, other approaches related to special warranty deed include selling with a lease-purchase agreement, partial interest transfer, quitclaim deed and life estate. These approaches guarantee that the property is free of claims during the transfer.
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Author: Karolina Korbut