Special Warranty and General Warranty Deeds—What’s the Difference?
When purchasing a piece of property, the last step in the process is the closing—where, among other things, the previous owner deeds you the property. This raises two questions: i.) what kind of deed are you getting, and ii.) what are the implications of receiving such a deed? While there are several options when it comes to the type of deed used to transfer property, this blog focuses on two of the more commonly used deeds: the Special Warranty Deed and the General Warranty Deed.
When a buyer receives any kind of Warranty Deed, she is assured that to a certain level her interest is protected against adverse claims of ownership. The difference between a Special Warranty and a General Warranty Deed lies within how much protection each deed provides. There are six types of “covenants of title” that come with a Warranty Deed regardless of whether it is a General or Special Warranty Deed; those covenants are as follows:
The covenant of seisen, which warrants that the seller owns the property they are attempting to transfer;
The covenant of the right to convey, which warrants that the seller has the legal right to transfer the property to the buyer;
The covenant against encumbrances, which warrants that there are no liens, mortgages, etc. against the property being transferred;
The covenant of warranty, which warrants that if a claim is made against the property the seller will defend them on the buyer’s behalf;
The covenant of quiet enjoyment, which warrants that the buyer will not be disrupted in their possession and enjoyment of the property; and
The covenant of further assurances, which warrants that the seller will execute any further actions needed to perfect title in the buyer.
General Warranty Deed
The General Warranty Deed is the strongest deed a buyer can receive regarding protections that come with the deed. When a buyer receives a General Warranty Deed the seller promises that all of the above 6 covenants are or will be true against themselves and against all previous owners of the property. The seller is promising the buyer that they did not violate any of the 6 covenants and that nobody in the chain of title prior to them has violated the 6 covenants either.
For example, A sells a piece of property to B, then B sells the property to C via a General Warranty Deed. B is then ensuring C that not only did B not violate any of the covenants but neither did A. In this example if D were to make a claim to the property through A, B would then be liable to C and must protect C’s interest in the property.
Special Warranty Deed
While a Special Warranty Deed still comes with its own protections, it is not as strong of a deed as the General Warranty Deed. When a buyer receives a Special Warranty Deed, the seller promises that the 6 covenants are or will be true above but only against themselves. The seller is promising the buyer that they did not violate any of the 6 covenants but offers no protection against defects caused by previous owners.
Using the same example from above, A sells a piece of property to B, B then sells the property to C via a Special Warranty Deed. C then discovers that A executed a mortgage to D which is unpaid. C would not be able to rely on B to protect their interest in the property as B only promised C that a claim would not arise from C’s ownership of the property.
When faced with the choice of what type of deed you receive as a buyer a General Warranty Deed is always preferable. Situations do arise however, where the seller will only transfer the property via a Special Warranty Deed. Such situations should not necessarily deter a buyer from purchasing a piece of property. The most important takeaway is knowing that as a buyer you get different protections based on the type of deed you receive.
This blog is made available by Mazurek, Belden & Burke, P.C., for educational purposes only, and not to provide specific legal advice. This blog does not create an attorney client relationship between you and Mazurek, Belden & Burke, P.C. This blog should not be used or considered as a substitute for competent legal advice from a licensed attorney in your state. If you have any questions about this topic, please contact us.