A bank that acquired a property through foreclosure in Virginia now wants to sell it. The bank's attorney recommends using a deed that warrants title only against claims arising during the bank's period of ownership, not against any prior defects. Which deed type is the attorney recommending?
Correct Answer
C) Special warranty deed
A special warranty deed limits the grantor's warranty to defects or encumbrances that arose only during the grantor's period of ownership. Banks and other institutional sellers that acquire property through foreclosure or tax sales commonly use special warranty deeds because they cannot warrant the entire chain of title prior to their acquisition, but they are willing to warrant against any issues they personally created.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In a cooperative (co-op), the building is owned by a corporation, and residents purchase shares of stock in the corporation that entitle them to a proprietary lease on a specific unit. Residents are shareholders, not property owners.
Fee simple absolute is the highest and most complete form of property ownership, giving the owner unrestricted rights to use, possess, enjoy, and dispose of the property. It is of unlimited duration and fully inheritable.
Community property is a system where property acquired during a marriage is owned equally by both spouses.
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