Limited Warranty Deed

3 Replies

Hello everyone,

I am looking into a deal in Alabama and the seller is looking to issue a limited warranty deed. I know the dictionary definition and Google definition from what I've found so far but would like some first hand feedback.

Is there anything wrong or any reason a limited warranty deed would be issued apart from protecting the seller? Is there anything additional I should look into before securing this deal and what other considerations of cautions do you recommend?

Thank you in advance for the help.

Corwyn

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I have never heard the term Limited warranty deed. I suspect it is the same as what is used commonly in MD which is a Special warranty deed. Using a general warranty deed, the seller is guaranteeing the title from before he or she owned it. A special warranty deed says I did nothing to screw up the title while I owned it. 

If it is common in your state to use the limited warranty deed i wouldn't worry about  it as long as you are getting title insurance.  If it is not common then I would ask an attorney what the potential risks and ramifications are. As an example a quit claim deed is a valid way to transfer title but it is a red flag for the next title company when you go to sell.