A developer in Traverse City sold a newly built condominium unit to buyer Kevin using a deed that warranted title only against claims arising from the developer's own actions during the period the developer owned the land, but not against any prior title defects. What type of deed did the developer use?

Correct Answer

D) Special warranty deed

A special warranty deed (also called a limited warranty deed) warrants title only against defects or claims that arose during the grantor's period of ownership. The grantor does not warrant against title defects that may have existed before they acquired the property. Developers in Michigan commonly use special warranty deeds to limit their warranty exposure to only the period during which they held title, protecting themselves from claims arising from prior owners or the original platting process.