Different types of deeds provide different levels of protection to the purchaser, and today we address the difference between a general warranty deed, special warranty deed, and quitclaim deed.
Warranty deeds “warrant” the grantee’s interest in the property, and provide legal protection against certain future property claims. That is, a grantee has legal recourse if in the deed title is warranted to be free and clear and it is not. A general warranty deed provides the greatest amount of protection to a grantee. In it, a seller conveys the parcel with certain covenants or warranties, including:
– that the seller owns the property and has the power to convey it;
– that the property is free of liens or encumbrances unless stated in the deed;
– that the title is good against third parties claiming title to the property; and
– that the seller will provide any documents necessary to render title marketable.
In a special warranty deed, the seller merely warrants against title defects incurred during that particular seller’s ownership. Unlike a general warranty deed, the special warranty deed does not provide legal assurance that the property is free and clear of all liens and encumbrances.
Both the special warranty deed and general warranty deed provide more protection than a quitclaim deed, which contains no title covenants. Hence lacking the term “warranty,” the seller does not warrant the condition of title to the property. Thus, if the seller transfers interest in a property that is encumbered, or worse, the seller does not actually own any interest in the property transferred, the grantee has no legal recourse. A quitclaim deed is typically used to convey real estate among family members, friends, or business partners. For example, a spouse may use a quitclaim deed to add a spouse to title, or to remove a spouse from title in the event of a divorce.
If you have a question as to which type of deed is best for your conveyance, consult legal counsel.