General Warranty Deed VS
Special Warranty Deed
General Warranty Deed
Definition:
A general
warranty deed is a type of deed where the grantor
(seller) guarantees that he or she holds clear title to
a piece of real estate and has a right to sell it to
you. The guarantee is not limited to the time the
grantor owned the property—it extends back to the
property's origins.
Important portions of a general warranty deed include,
·
The
grantor states there are no hidden liens or encumbrances
on the property. In other words, there are no debts or
holds other than those that are obvious in public
records.
·
The
grantor declares that he or she is the owner of the
property and has a right to sell it to you.
·
The
grantor guarantees that if the title ever fails he or
she will compensate the grantee (new owner) for any
losses.
That
guarantee might or might not be helpful, because the
grantor may be dead or unable to follow through on the
promise if title problems are found in the future.
Most
people hire someone (e.g., Title Company) to perform a
title search to determine if there are title
problems that must be resolved before they purchase a
property. They can also purchase
title insurance, which covers many types of losses
that occur if problems are discovered later.
Special Warranty Deed
The special warranty deed is not nearly as protective of
the buyer as is the general warranty deed. The grantor
of a special warranty deed conveys the property with two
warranties:
·
The grantor warrants that they have received title.
·
the grantor warrants, unless noted specifically in the
deed, that the property was not encumbered
during their period of ownership.
The grantor of the special warranty deed, in effect,
only warrants the title against their own actions or
omissions. They warrant nothing prior to their taking
title. If specifically stated in the deed, other
warranties can be conveyed.
Special warranty deeds are frequently used by executors
and trustees.
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