What is a Special Warranty Deed
A Special Warranty Deed is a type of deed that is typically used in the sale of real estate. As with any deed, the Special Warranty Deed conveys ownership of the property from the seller to the buyer. However, unlike a General Warranty Deed, a Special Warranty Deed only guarantees that the title is clear from any defects that may have occurred during the seller’s ownership of the property.
If there are any defects in the title that predate the seller’s ownership, the buyer will be responsible for addressing them. For this reason, a Special Warranty Deed is often used in situations where the property has changed hands multiple times and it is not feasible for the seller to guarantee the title’s history. While a Special Warranty Deed offers less protection for the buyer than a General Warranty Deed, it can still be a valuable tool in ensuring a smooth transaction.
What are the benefits of using a Special Warranty Deed
Special Warranty Deeds offer a few key benefits for both the buyer and the seller in a real estate transaction. For the buyer, a Special Warranty Deed provides assurance that the title is clear of any liens or other claims. In addition, the Special Warranty Deed includes a covenant, or promise, from the seller that they have not done anything to harm the property during their ownership.
This gives the buyer additional peace of mind that they are purchasing a quality property. For the seller, a Special Warranty Deed helps to protect them from any future liability stemming from their ownership of the property. By including a covenant that they have not harmed the property, the seller can help to avoid any potential legal action that might be taken against them down the road. Overall, Special Warranty Deeds provide valuable protections for both buyers and sellers in real estate transactions.
When is it appropriate to use a Special Warranty Deed
This type of deed is commonly used in situations where the seller is conveying property that they have only owned for a short period of time, such as when selling a newly constructed home. In contrast, a general warranty deed would guarantee the title against any kind of defect, regardless of when it arose. For this reason, special warranty deeds are less attractive to buyers than general warranty deeds, since they offer less protection. However, in some cases special warranty deeds may be the only type of deed available, such as when purchasing a home from a builder who has only owned the property for a short period of time. In these cases, it is important to be aware of the limitations of a special warranty deed so that you can make an informed decision about whether or not to purchase the property.
How to create a Special Warranty Deed
To create a Special Warranty Deed, the grantor must first draft the deed. This should include the names of the parties involved, as well as a description of the property. The deed should then be signed by the grantor and witnesses, and notarized by a notary public. Once this is done, the deed should be filed with the appropriate government office, such as the county recorder’s office.
What happens if there is a problem with the property after the sale
Many people assume that once a property is sold, the transaction is complete and the responsibility of the new owner. However, this is not always the case. In some instances, problems may arise with the property after the sale is final. If this occurs, it is important to understand your rights and options as a new homeowner. The first step is to determine whether the problem is covered by your homeowners insurance policy. If it is, you will need to file a claim and follow the process outlined by your insurer. If the problem is not covered by insurance, you may still be able to seek reimbursement from the seller if it can be shown that they were aware of the issue prior to the sale. Finally, if all else fails, you may need to pursue legal action in order to recover damages. While no one wants to deal with problems after buying a new home, it is important to be prepared in case something does go wrong.
How to avoid problems when using a Special Warranty Deed
There are a few potential problems that can arise when using a Special Warranty Deed. First, if the property being conveyed is subject to any liens or encumbrances, the buyer will not be protected against them. Second, if the seller conveys the property to the buyer with the intention of defrauding or deceiving them, the buyer will not be protected against that either. Finally, if the property being conveyed is not actually owned by the seller, the buyer will not be able to obtain title to the property.
In order to avoid these problems, it is important to carefully review all documents before signing anything, and to consult with an experienced real estate attorney if there are any questions or concerns. By taking these precautions, you can help ensure that your transaction goes smoothly and that you end up with the property you intended to purchase.
Tips for using a Special Warranty Deed
In order to ensure that the warranties contained in the deed are adequate, buyers should:
- Obtain a title insurance policy to protect against any title defects that may exist.
- Make sure that the property is free of any liens or encumbrances.
- Verify that the grantor has the right to convey the property.
By taking these precautions, buyers can help to ensure that their investment is protected.