A Maryland licensee is advising a seller client who is selling a commercial property in Frederick County that she has owned for 15 years. The buyer's attorney insists on a general warranty deed, but the seller's attorney recommends a special warranty deed. Which of the following best explains why a seller might prefer to use a special warranty deed rather than a general warranty deed?
Correct Answer
A) A special warranty deed limits the seller's warranty obligation to title defects arising only during the seller's own period of ownership, reducing exposure to claims from the prior chain of title
A special warranty deed limits the grantor's warranty obligation to title defects and encumbrances that arose during the grantor's own period of ownership. This is advantageous to the seller because it protects her from liability for title problems that may have existed in the chain of title before she acquired the property 15 years ago. By contrast, a general warranty deed would expose her to claims arising from any point in the property's history. Sellers of commercial properties in Maryland commonly prefer special warranty deeds for this reason, as per Md. Code Ann., Real Prop. §§ 2-101 et seq.
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