A Virginia investor purchases a property at a tax sale and receives a deed from the treasurer. Five years later, she sells the property to a buyer and issues a special warranty deed. The buyer later discovers that the original property owner had challenged the tax sale as procedurally defective — a claim that arose before the investor's ownership. The buyer sues the investor under the special warranty deed covenants. Which of the following correctly describes the outcome?
Correct Answer
B) The investor is not liable because the special warranty deed only covers defects arising during the investor's period of ownership, and the tax sale defect predates her ownership
This scenario illustrates the critical limitation of a special warranty deed. The investor's warranty under the special warranty deed is limited strictly to defects arising during her period of ownership — the five years she held the property. The challenge to the tax sale is a defect that arose before the investor acquired title (it relates to the original tax sale procedure). Because this defect predates the investor's ownership, it falls entirely outside the scope of her special warranty deed covenants. The buyer has no warranty claim against the investor for this pre-existing defect. This is why buyers purchasing property originally acquired through tax sales should obtain title insurance and carefully evaluate the deed type offered.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
Riparian rights concern properties bordering flowing bodies of water (rivers, streams), while littoral rights concern properties bordering non-flowing bodies of water (lakes, oceans).
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