Mortgages & Creative Financing

What’s in a [Deed] Name? An Exploration of Deeds and Warranties

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Deed type is often a neglected negotiation point in transactional real estate, somewhere far after purchase price and the target closing date, but slightly before whether email notification is acceptable.  But the type of deed you receive from your seller can provide meaningful and long-lasting peace of mind (or angst) about the quality of title that you hold to your property. 

Understanding the Warranties

At their most basic, deed warranties obligate the seller to defend the buyer (read: litigate on the buyer’s behalf) against third party challenges to the use or ownership of the property.  It stands to reason then, that the broader the set of warranties provided, the greater assurance the buyer has that they securely own the property in the condition stated in the deed. 

While the titles of the deeds vary from place to place, some common trends can be drawn regarding the protections each type provides to the buyer.  These descriptions should help guide you to the type of deed you would prefer in light of the type of transaction you are pursuing. 

The most common warranties of title include: (i) the seller actually owns the property; (ii) there are no claims against the property by third parties (except any listed on the deed); and (iii) the seller has the right to convey the property.  Other warranties vary greatly, but may include such items as: (i) the buyer will have the quiet enjoyment of the property without fear of eviction; (ii) the seller will provide such further assurances as may be necessary to make the buyer’s title good; and (iii) after conveyance of the property, the buyer will hold good title and have possession of the property. 

In some cases, the deed will expressly state which warranties are included.  Typically the statement of warranties follows the habendum, the “to have and to hold” clause.  If not expressly stated, state law may define which warranties are included in a particular deed type. 

The Time Factor and Life Without Warranty

Many deeds include the term “warranty” in the title, but the duration of the grantor’s warranty is another major factor in determining which deed type is best for you.  The duration of the warranty is most frequently restricted by the terms “general” or “special” or “limited”.  In a general warranty deed, the seller warrants that no encumbrances arose against the property during the seller’s period of ownership and during the seller’s predecessors’ terms of ownership as well.  In a special or limited warranty deed, any warranties made are limited to the seller’s period of ownership only. 

By comparison, a quitclaim deed carries no warranties of title at all.  By receiving a quitclaim deed, you may be receiving nothing at all.  This is not to say that you should never give or receive a quitclaim deed.  There are many cases where a quitclaim deed is the most appropriate form.  For example, property being transferred between two related entities is often conveyed via quitclaim deed.

General Considerations

The types of deeds available to you will depend first and foremost on the state in which the property is located.  State laws often limit the types of deeds, therefore providing a solid first step in understanding your options.  Most state statutes can be accessed for free via the internet, simply by running a search for “{State name} statutes”.  In the table of contents or index, locate the real property section and search for “deed” or “conveyance”.  Whenever possible, use the statutory form of the deed to ensure that you are receiving the type of title warranties you believe you are.  Other alternatives may include the state real estate commission website or manual; the state’s real estate broker’s manual; or a title company database, such as Stewart Title’s Virtual Underwriter. 

A few final notes regarding deeds:

Don’t let the title of the deed mislead you as to the protection the deed offers.  Many states refer to any type of deed given by a corporation, or other legal entity, as a “corporate deed”. 

If you are purchasing property that is held by a trust, reference to a “trustee’s deed” should not cause alarm.  In such cases, the name refers to the person executing the deed, without indication as to the warranties contained. 

Many states acknowledge a variant of deed referred to as “bargain and sale”.  These unique deeds convey to the buyer not only property the seller owns as of the date of the closing, but any after-acquired property as well. 

In any case, make sure that your purchase agreement language explicitly includes a description of the types of warranties you are seeking.

    Replied over 7 years ago
    Good Article Treasa.
    Jared Gruber
    Replied over 7 years ago
    Thanks for the post, good information. In PA, where I practice and invest, the standard PAR agreement includes provision for a general warranty deed, unless otherwise modified.