Special Warranty Deed

What is a Special Warranty Deed?

A Special Warranty Deed is a legal document that conveys property ownership with a limited guarantee. The grantor—the person or entity transferring the property—warrants or guarantees the title against defects or claims arising only during their period of ownership. It's less protective than a general warranty deed, which covers the property's entire history.

Key features of a Special Warranty Deed include:

When You Might Need a Special Warranty Deed

You might use a Special Warranty Deed in situations like:

• As a seller, you owned the property for a short period, hence, can only guarantee a limited warranty.
• As a buyer, you're purchasing property from a trust, estate, or corporation that hasn't owned the property long enough to offer a general warranty.

Who Commonly Utilizes a Special Warranty Deed?

The Special Warranty Deed is commonly used by entities that hold properties temporarily, like real estate investment firms, banks, or trustees. It's also popular in commercial real estate transactions.

Legal Protection Offered by a Special Warranty Deed

While a Special Warranty Deed offers less protection than a General Warranty Deed, it does provide some safeguards. If a title dispute arises from an event during the grantor's ownership, the grantor is legally obligated to defend the title.

Example of Special Warranty Deed Use

Example: A real estate investment firm purchases a property, makes improvements, then sells it. Since the firm has owned the property for a short time, they use a Special Warranty Deed. The buyer can still take legal action if problems with the title arise from the firm's ownership period.

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