Special Warranty Deed
A special warranty deed in real estate is a legal document used to transfer ownership interest in a property from one party (the grantor) to another party (the grantee) with limited warranties or assurances regarding the title. Unlike a general warranty deed, which provides comprehensive warranties covering the entire chain of title, a special warranty deed only guarantees that the grantor has not caused any title defects or encumbrances during their ownership of the property.
Key aspects of a special warranty deed include:
1. Limited Warranty: The special warranty deed contains warranties that are limited to the time period during which the grantor owned the property. This means that the grantor only guarantees that they have not created any title defects or encumbrances during their ownership, but they do not warrant against defects that may have existed before their ownership.
2. Protection Against Title Defects: While the special warranty deed offers some protection against title defects caused by the grantor, it does not provide assurances regarding title issues that may have arisen before the grantor’s ownership. This means that the grantee assumes some risk regarding the condition of the title prior to the grantor’s ownership.
3. Common Uses: Special warranty deeds are commonly used in commercial real estate transactions, as well as in transactions involving properties acquired through foreclosure or distressed sales. They may also be used by corporate entities or trusts transferring ownership of property, where the grantor may have limited knowledge of the property’s history.
4. Recording and Legal Effect: Like other types of deeds, a special warranty deed must be properly executed, acknowledged, and recorded with the appropriate county or municipal authority to be legally valid and enforceable. Once recorded, the deed becomes a permanent public record of the property transfer.
Overall, a special warranty deed provides some level of protection to the grantee against title defects caused by the grantor, but it does not offer the same comprehensive warranties as a general warranty deed. It’s important for both parties to carefully review the terms of the deed and to seek legal advice if there are any concerns about the property’s title or ownership history.
