1. Definition: What is a Warranty Deed?
A Warranty Deed is a legal document that promises the Grantor or Seller has the right to transfer a piece of real property (i.e. land, home, or building) to the Grantee or Buyer.
Each state has different types of warranty deeds depending on the type of warranty and title protection being given to the buyer.
What’s the Difference? General, Special, and Quitclaim Warranty Deeds
When land is being purchased between two parties, after the closing, the land sale contract is merged into the deed. Therefore, any liability must arise out of the deed, not the land sale contract.
Generally, there are three kinds:
- General Warranty Deed
- Special Warranty Deed
- Quit Claim Deed or Quitclaim Deed (but NOT quick claim deed)
Each deed differs in terms of how much protection is granted to the quality or health of the property’s title.
The differences are:
|General Warranty Deed||Special Warranty Deed||Quit Claim Deed|
|Greatest level of protection||Medium level of protection||Least amount of protection|
|Warrants title against ALL defects, even if the current Grantor did not cause these defects||Warrants ONLY against defects caused by the current Grantor during the time they possessed the property||NO warranties as to the quality of the title|
|Covers the property’s entire history from before and after the Grantor owned property||Covers only the period of time the Grantor owned the property||Does not cover any period of time the Grantor owned the property|
|Most commonly used when money is exchanged||Most commonly used when money is exchanged||No money is exchanged|
Liens, outstanding debts, or money owed are often transferred with Quitclaim Deeds to the new owner or Grantee.
2. How to Write Yours
Your Deed should identify the following basic elements:
- Grantor: this is the individual(s) or corporation who currently owns the property
- Grantee: this is the individual(s) or corporation who will be the new owner
- Mailing Addresses: physical addresses, not P.O. boxes, of both parties
- Consideration: this is the amount of money that will be given for the property, if any
- Legal Description: usually located on your property deed, the legal description helps everyone identify which piece of property is being transferred.
- Parcel Number: this number is usually listed on the property’s tax statement but if you have trouble locating the parcel number, you can also call or visit the city, county, or court office where the property taxes are paid for more information
- Witnesses: some states require that witnesses watch the owner sign the deed
- Notary: the personal transferring the property needs to take the deed to a notary public who will verify that the signature on the deed is authentic
Your legal description, for example, should look like the following:
- Lots 6, 7, and the South ½ of Lot 3, West 60 feet of South ½ of Lot 4, West 60 feet of Lot 5 and Lot 8, Block 20, OLD SURVEY, Leesville, Vernon Parish, Louisiana.
The document should be filed in the public records at your local land records office, sometimes called the County Recorder’s Office, Land Registry Office, or Register of Deeds. You can usually find the land records office in your local courthouse. The clerk will stamp your deed with the date and numbers indicating the book and page number where it can be found in the court’s filing system. The office will often charge a small fee around $15 a page to record your deed.
Since land and property are valuable, deeds must always be notarized.
In addition to the basic provisions stated above, here are some other terms you may want to include if they apply to your property.
- Easements: the Grantor can reserve the right to continue using the land, perhaps to keep fishing in the pond or walking across a certain path
- Life Estate: the Grantor can reserve a life estate interest in the property if they want to continue being the legal owner of the property until their death for tax purposes
- Mineral Rights: the Grantor can reserve any remaining interests in the property’s subsurface oil, gas, or other mineral rights
With respect to mineral rights, be sure to not interfere with neighboring landowners rights to lateral support or subjacent support. In other words, any excavations needed to access the minerals should not cause nearby properties to cave in or subside. Otherwise, you may face negligence or strict liability for failure to support the land or any buildings located on the surface.
3. When You Need One
Warranty Deeds are most commonly used for real estate sales of either residential or commercial property. Unlike a Quitclaim Deed which is used between family members who know one another, these are used when the Buyer does not know the Grantor but wants a minimum level of protection or guarantees about the property he or she is purchasing.
A Special Warranty Deed usually contains the following phrase “Grantor remises, releases, alienates, and conveys”. There is no guarantee against title defenses or encumbrances that may have existed before the Grantor received the property.
This document protects the Grantee against any title defects that may have occurred when property changed into the current owner’s hands. The primary difference between the different types is the amount of protection and the period of time covered.
Present and Future Covenants:
If you want the following six protections or “covenants”, you should execute a General Warranty or Special Warranty Deed.
- Covenant of Seisin: Grantor promises that the deed describes the land being transferred
- Covenant of the Right to Convey: Grantor promises that they have the legal authority to transfer the property to the Grantee
- Covenant against Encumbrances: Grantor promises that there are no hidden or undisclosed mortgages, covenants, or easements that would burden the property or lower its value
- Covenant of Quiet Enjoyment: Grantor promises to defend against any future challenges to the Grantee’s title to the property
- Covenant of Warranty: Grantor promises to defend against any future encroachment challenges to the Grantee’s property
- Covenant of Further Assurances: Grantor promises to fix future problems with the title
A Special Warranty Deed offers these six covenants or protections only during the time when the Grantor owned the land.
4. Download a Free Template
This document will protect both the Grantor and Grantee, especially if the parties are not related.
Unlike a Quitclaim Deed, this document does more than simply transfer interest in the real property. It is a warranty, or proof of ownership, and is best suited for sale situations as opposed to inheritance or simple transfer of ownership.
Our free template below allows an owner to transfer whatever right and title to real property that he or she may have to a new owner. It also allows for exceptions such as easements or life estates.
Be sure to leave space at the top of your Warranty Deed for the County Recorder’s office to put their seal on the document. Be sure that all property taxes have also been paid in full before filing the deed.
5. Consequences of Not Using One
Without this document you may have no recourse if you find out that the property you purchased is not free of debt or other liens. Perhaps, the Grantor did not even have the authority to sell the property.
If you have a Warranty Deed, however, you have the right to remedies, primarily in the form of money damages.
If any of the six covenants or promises are violated, the following damages are available:
Violations of Present Covenants
- Covenant of Seisin: Grantor must pay either the purchase price OR the cost of protecting title (whichever is less)
- Covenant of the Right to Convey: Grantor must pay either the purchase price OR the cost of protecting title (whichever is less)
- Covenant against Encumbrances: Grantor must pay either the difference in value of the property with good title versus the value of the property with the title defect OR the cost of removing the undisclosed mortgage, covenant, easement, or burden on the land (whichever is less)
Violations of Future Covenants
- Covenant of Quiet Enjoyment: Grantor must pay either the purchase price OR the cost of defending the defective title (whichever is less)
- Covenant of Warranty: Grantor must pay either the purchase price OR the cost of defending the defective title (whichever is less)
- Covenant of Further Assurances: Grantor must pay either the purchase price OR the cost of protecting title (whichever is less)