Warranty Deeds

April 22, 2014

Warranty Deeds

 

What does the word “Warranty” mean?

 

A warranty is an assurance or a guarantee. When a seller “warrants” something (in any transaction) they are promising that there is nothing wrong or if there is something wrong they will to “fix it” at no cost to the purchaser for a stated period of time. This holds true with any warranty including land. A warranty in a Deed of Conveyance is also called a covenant of warranty ~ which is “a covenant in a deed to land by which the party conveying assures the grantee that he or she will enjoy the premises free from interference by any person claiming under a superior title”.

 

What is a General Warranty Deed?

 

In a General Warranty Deed the seller warrants (assures or guarantees) that he holds clear title to the property and has a right to sell it. This warranty covers all problems back in the chain of title whether the current seller created them or a previous owner created them. Therefore if a title problem arises the buyer would have the right, even years later, to sue the seller for a breach of warranty and may be able to force the seller to cooperate in getting the problem fixed.

 

What is a Special Warranty Deed?

 

In a Special Warranty Deed the seller only warrants (assures or guarantees) that he/she has not created a title problem ( as opposed to the general warranty’s assurance that no one in the chain of title has created a title issue). So, if a title problem arises later, even years later, the buyer would have the right to sue the seller for breach of warranty but only if the seller created the problem. If you purchase property with a Special Warranty Deed you can still convey it out (sell it) by general warranty if the contract calls for a General Warranty Deed.

 

So it is obvious that general warranty is better than special warranty but this doesn’t pose a problem to the purchaser who has an Owner’s title insurance policy as they are covered.

 

Catherine L. Gillman

Principal Partner

Ekko Title

www.ekkotitle.com

4545 Daisy Reid Avenue, Suite 100

Prince William, Virginia 22192

703-497-3556 office

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