LIMITED WARRANTY DEED
(also called SPECIAL WARRANTY DEED)

Limits liability / defensibility of title to matters that occurred during THAT owner's possession of the property ONLY. Special and limited warranty deeds are often given in connection with conveyances by trusts and estates and by land contract vendors and financial institutions that have taken back property by foreclosure or deed in lieu of foreclosure in satisfaction of a defaulted mortgage loan. They offer much less protection to the grantee than does a general warranty deed.

GENERAL WARRANTY DEED

Warrants that title matters are clear for the entire title chain, for all previous owners.

REAL-LIFE SITUATION WE ENCOUNTERED YESTERDAY:
John Smith acquires title via GENERAL Warranty Deed on 6/1/02. Grantor is ABC Builders.

ABC Builders acquires title via GENERAL Warranty Deed on 9/1/02. Grantor is XYZ Developers.

Wait - how can ABC sell John Smith a house that they don't even own yet? Since ABC conveyed it via a GENERAL Warranty Deed, they are guaranteeing that all title matters have been addressed. If ABC had conveyed via LIMITED WD, there would be a problem.

SPECIAL WARRANTY DEED

A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of his or her tenure and ownership of the property and not against defects existing before that time, generally using the language, "by, through or under the grantor but not otherwise."

Helping you transfer ownership of real property, and giving assurance that nothing you have done during your period of ownership will affect the new owners title to the property.

Can be used to transfer title to property and indemnify the new owner against any claim arising from the previous owners actions.

When the owner of a piece of real estate (grantor) wants to transfer ownership or partial ownership of the property to another person (grantee), he or she needs to affirm that he or she is entitled to do so, so that the new owner can be assured that he or she will hold good title to the property.

This form allows the grantor to make this transfer, while guaranteeing that he or she is entitled to do so, and affirming that no action undertaken during his or her time as owner has created any outstanding claim on the property (such as an unpaid mortgage or a tax lien). If there is any such liability, the grantor agrees to indemnify the new owner of any arising costs. Unlike a general warranty deed, this form does not guarantee that there is no claim arising from the actions of an earlier owner.


General Warranty Deeds

The most common deed is called a "General Warranty" deed. Such a deed contains "warranties" or guarantees from the grantor (commonly the "Seller") to the grantee (commonly the "Buyer") that the Seller is the owner of the property and that no one else has any interest in the property, other than those exceptions stated in the deed. If it later turns out that someone else owns an interest in the property (such as an easement) that was not disclosed in the deed, the Buyer can sue the Seller because of the encumbrance. If you are purchasing title insurance with the sale (which will almost always be the case when a mortgage is needed to purchase the property), the title insurance company will require that you receive a general warranty deed.

Limited Warranty Deeds

A "Limited Warranty" deed is a less common form of deed that warrants the state of title while the seller owned the property. (A "Limited Warranty" deeds warranty is limited to the time the grantor owned the property, while a "General Warranty" deeds warranties also cover all the time the property was owned by prior owners.)

Quit Claim Deeds

A "Quit Claim" deed conveys to a Buyer only what the Seller actually owns, if anything, and provides no guarantee from the Seller to the Buyer that the Seller has any interest in the property to convey. The rule to follow for a person accepting a quit claim deed is "Buyer beware". If it later turns out that the Sellers rights to use the property are encumbered by another persons interest in the property, the Buyer is out of luck, and has no recourse against the Seller.

Life Estate Deeds

A "Life Estate" deed allows the owner to retain the right to continue the use of the property (live in the house) for the rest of his or her life, and leave the property directly to another person (referred to as the "Remainderman") upon his or her death. Use of such a deed will "avoid probate" but also creates an irrevocable gift to the Remainderman. If later the owner wants to sell the entire property, he or she must secure the permission of the Remainderman, and the Remainderman is entitled to a share of the sale proceeds and must join the owner in executing the deed to the buyer of the property.

Survivorship Deeds

A "Survivorship Deed" is a form of deed that is most commonly used when a husband and wife purchase real property together, although it can be used in other situations. This deed allows the owners to "avoid probate" upon the first death (but when the survivor dies, the property will be subject to probate administration). It is not recommended that such a deed be used between parents and children, siblings or unrelated parties unless you have consulted with a lawyer. With a survivorship deed, the last living person named on the deed becomes the 100% owner of the property. If the objective is to divide the property equally among several people, a survivorship deed should not be used.


Special and limited warranty deeds are often given in connection with conveyances by trusts and estates and by land contract vendors and financial institutions that have taken back property by foreclosure or deed in lieu of foreclosure in satisfaction of a defaulted mortgage loan. They offer much less protection to the grantee than does a general warranty deed.