What Is a Special Warranty Deed?

What Is a Special Warranty Deed?
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Deeds are the legal documents used to transfer property ownership between two parties. There are a few different types of deeds commonly used, including the quitclaim deed, warranty deed and special warranty deed. The type of deed used for an ownership transfer depends on circumstances of the agreement. Special warranty deeds are typically used when a property is purchased at a fair market sales price.

What is a Real Estate Deed?

Deeds are used to convey ownership in a specific piece of property and home from the current owner to another party. By signing a deed, the owner, also called the grantor, states that he grants all or a portion of his interest in the property to the grantee. While all of the different types of deeds complete conveyances, there are different legal implications between the types. For example, quitclaim deeds offer no guarantee to the grantees, while warranty deeds do. Warranty deeds are further broken down into specific types, such as the special warranty deed.

What is the Difference Between a Warranty Deed and a Special Warranty?

When a general warranty deed or special warranty deed is used, the grantor makes specific guarantees to the grantee concerning the property's title. First, the grantor ensures that he is the legal owner of the property in question and also has the right to transfer or sale his rights to the property. The second guarantee is that there are no liens against the property or encumbrances, unless stated within the deed. Third, the grantor promises that no one else has ownership in the property. If any of these guarantees are challenged or proved wrong during the grantee's ownership of the property, the grantor must provide proof to defend the title.

Both general and special warranty deeds offer these guarantees. The difference is the time frame the guarantees cover. The general warranty deed covers the entire history of the property, while the special warranty deed only covers the time the grantor had ownership.

Features of the Special Warranty

Special warranty deeds must contain the full names of both the grantor and grantee. Additionally, the deed needs to include a legal description of the property in question. The grantor must sign the deed, and his signature must be witnessed and acknowledged by a notary public. In some states, additional witnesses are required to sign the deed. States also have other guidelines for information that needs to be included on the deed, such as the name of the person who prepared it.

Recording Preserves the Chain of Title

Once a deed is signed and notarized, it should be filed on public record with the county clerk or recorder where the property is located. It's not a requirement to record a special warranty deed; however, if a deed isn't recorded, the chain of title to the property is broken. Recording the deed ensures that the next time a title search is completed, the grantees will be listed as the current owners.