{"id":295,"date":"2015-10-05T17:09:06","date_gmt":"2015-10-05T17:09:06","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=295"},"modified":"2024-05-14T09:10:33","modified_gmt":"2024-05-14T13:10:33","slug":"what-is-a-special-warranty-deed","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/what-is-a-special-warranty-deed\/","title":{"rendered":"What is a Special Warranty Deed?"},"content":{"rendered":"\n
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If you’re like most people planning to make a real estate\npurchase, you want to know that the property you’re purchasing is actually\nowned by the seller, that it’s in reasonably good shape, and that the title is\nfree of defects. Real estate transactions aren’t always as seamless or clean as\nbuyers might like, though. A special warranty deed\u2014sometimes referred to as a limited\nwarranty deed\u2014warrants only against defects during the seller’s time as\nproperty owner. It will not protect against title issues that arose prior to\nthe time the seller took occupancy. Consequently, it offers less protection to\nbuyers, and more protection to sellers, than a general warranty deed, which is\nthe most common option for selling or buying a property. <\/p>\n\n\n\n\n\n\n\n

What is a Special Warranty Deed? <\/strong><\/h3>\n\n\n\n

With a special warranty deed, the seller warrants that he or\nshe is the rightful owner of the property, and is authorized to sell it. He or\nshe provides a warranty only against defects in the title during his or her\nownership. <\/p>\n\n\n\n

Special warranty deeds are unusual for residential real\nestate transactions, since it’s risky for people to move into a home when they\ndon’t know the title’s history. But these sorts of deeds are common among\nbank-owned properties, when a property has been foreclosed upon, and in\ncommercial and corporate real estate transactions. <\/p>\n\n\n\n

Special warranty deeds usually contain specific language\ntransferring the property, indicating that the seller \u201cgrants, conveys, and\nspecially warrants\u201d the property. <\/p>\n\n\n\n

The Practical Effects of a Special Warranty Deed<\/strong><\/h3>\n\n\n\n

Humans are creatures of habit, which means we tend to assume\nthat, if something has been going well, it will continue to do so. In the case\nof a special warranty deed, this can have unanticipated consequences. You might\nassume that, because the seller had no problems with the property title, the\nsame will hold true for you. But understanding the practical effects of a\nspecial warranty deed can help you reasonably assess whether you want to take\non the risk associated with such a deed. <\/p>\n\n\n\n

One common scenario in the world of title defects is\noutstanding property taxes. Say you purchase a property the seller has owned\nfor 10 years, reasonably believing that such a long ownership tenure suggests\nthat there must be nothing wrong with the title. Meanwhile, a local election\nhas brought a county commissioner into power who wants to crack down on back\nproperty taxes. <\/p>\n\n\n\n

Unbeknownst to you, the county commissioner asks her staff\nto seek out people who owe back taxes, and they find that, three owners ago, that\nparticular owner went years without paying his or her taxes. Suddenly they’re\ncoming after you for the balance, and because you have a special warranty deed,\nthere’s little you can do. You can’t take any action against the seller, and\nunless you have title insurance, you could be stuck choosing between paying\nsomeone else’s taxes and facing a lien on your property. <\/p>\n\n\n\n

Why Sellers Use Special Warranty Deeds <\/strong><\/h3>\n\n\n\n

A special warranty deed offers significant liability protection\nto sellers, which might help explain why sellers use it when they’re not sure\nabout a property’s history. Some common scenarios in which sellers use special\nwarranty deeds include:<\/p>\n\n\n\n