Legal Guidelines to Warranty Deeds
- When it comes to transferring real property from one person to another, there's more than just one type of deed. All deeds commence with a granting clause that actually conveys or transfers the property from the grantor to grantee (such as a seller to a buyer). Deeds end with a habendum clause, which describes the type of estate created, usually a fee simple, but sometimes a life estate. Deeds that convey real property are delineated by the types of warranties they include or if they include them at all.
- When a grantor gives a warranty, the grantor is stating that he or she will warrant and defend the title and defend the purchaser's title if necessary, should anyone else claim interest in the property. There are general warranty deeds and special warranty deeds.
To create a special warranty deed, it is necessary to add the following line to the deed's warranty language: "by, through or under grantor (and not otherwise)." This basically means that the grantor will protect the title for anyone asserting a claim during the time the grantor held title to the property. However, a general warranty deed offers an even stronger title. A general warranty, or guarantee that the title is good, extends back to the time the property was first deeded.
Because warranty deeds transfer the title to real property, not just the grantor's interest, they are extremely attractive to those shopping for real estate and are also desirable in the eyes of title insurance companies. Real property that is transferred through a warranty deed guarantees that a title is not "clouded." - Real property can also be transferred through a deed without warranty, such as a "bargain and sale deed without covenants." This type of deed transfers property but offers a purchaser no assurances that the property comes with no encumbrances, such as a tax lien. Someone who buys a foreclosed home through a sheriff's auction will typically be granted this type of deed.
A quitclaim deed is actually a misnomer, as it doesn't actually grant or convey the title to land; rather, it "quits" the grantor's interest and signs it over to the grantee. Quitclaims are generally used when there is trust between the grantor and grantee and both know about potential encumbrances to the property. For example, after a divorce, the spouse who is awarded the familial home may have her ex sign a quitclaim to divest his interest in the property. Alternately, someone who wishes to pass interest in land to an heir can sign a quitclaim, grant himself a life estate, and reside in the home until he dies.