Warranty Deed

A warranty deed is a document that provides the greatest amount of protection to the purchaser of property as it pledges or warrants that the owner owns the property free and clear of any outstanding liens, mortgages, or other encumbrances against it.

A deed is a document that transfers property from one entity to another. There are various types of deeds, however, the difference in deeds can usually be defined by what warranties and covenants are being conveyed from the grantor (seller) to the grantee (buyer). A general warranty deed provides the grantee with the highest form of protection as it assures the following basic warranties:

• The grantor warrants that they are the rightful owner of the property and have a legal right to transfer the title.
• The grantor warrants that the property is free and clear of all liens and that there are no outstanding claims on the property from any type of creditor using it as collateral.
• There is a guarantee that the title would withstand any third-party claims to ownership of the property.
• The grantor will do whatever is necessary to make good the grantee’s title to the property

With the general warranty deed, the grantor would be responsible for a breach of any of these conveyed warranties and guarantees – even if the breach occurred without their knowledge or during a period when the grantor did not own the property. The general warranty deed places a great amount of risk upon the grantor as he or she is responsible for any breaches that may have occurred well beyond their knowledge or ownership of the property. For this reason, title insurance is used in most transactions to guard against possible claims and liens. A title company would provide a full title search and explore any other possible breaches before the property is transferred.  

There is also a special warranty deed. The special warranty deed is not nearly as comprehensive as its general counterpart as it only conveys two warranties.

• The grantor warrants that they have received title.
• The grantor warrants that the property was not encumbered during the time the grantor owned the property.

A special warranty deed does not protect against any claims prior to the grantor receiving title. Special warranty deeds are typically used more in the commercial real estate world.  

As with most deeds, the warranty deed should contain an accurate legal description of the property being conveyed, be signed and witnessed in accordance to state law where the property is located and delivered to the grantee during the closing of the transaction.