Unlike a general warranty deed, a special warranty deed limits the grantor's liability to only the time they owned the property. The grantor guarantees they did nothing to impair the title during their ownership but makes no promises about what happened before. Special warranty deeds are commonly used by fiduciaries, executors, and corporate sellers. Banks selling foreclosed properties frequently use this type of deed.
A bank forecloses on a property and sells it to an investor. The bank provides a special warranty deed because it can only guarantee that no title problems arose during the short time the bank held ownership after foreclosure.
Exam tip: The key distinction is the TIME PERIOD of warranty. General warranty = all time. Special warranty = only during grantor's ownership. Questions often present scenarios involving corporate or fiduciary sellers to test whether you know they typically use special warranty deeds.
Related Terms
Related Concepts
A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.
A general warranty deed provides the greatest protection to the grantee by guaranteeing that the grantor holds clear title and has the right to sell the property. It includes covenants that protect against all defects in title, even those arising before the grantor owned the property.
A quitclaim deed transfers whatever interest the grantor may have in a property without making any warranties or guarantees about the quality of title. It offers the least protection to the grantee.
A bargain and sale deed implies that the grantor holds title and possession of the property but does not include warranties against encumbrances or title defects.
For a deed to be valid, it must contain several essential elements including a competent grantor, identifiable grantee, consideration, legal description, granting clause, signature of the grantor, and delivery and acceptance.
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