Q:

What is a special warranty deed?

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Quick Answer

A special warranty deed is used to convey a real estate title to the buyer and grants a warranty against the seller's actions during the seller's ownership only. It has fewer protections for the buyer compared to a general warranty deed, which warranties against defects through all ownerships.

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Full Answer

Special warranty deeds warranty against defects in the title during the seller's ownership, so the buyer cannot sue for a defect that occurred during a previous owner's claim of the property. In a special warranty deed, the seller makes two warranties. First, the seller affirms that he owns the property and has a title. Second, he warranties that during his ownership, the property's title was not encumbered; for example, there would be no unpaid property taxes or outstanding liens. Special warranty deeds, also called limited warranty deeds, are used during foreclosures, commercial real estate sales or real estate transactions involving corporations or partnerships.

A special warranty deed is not as desirable as a general warranty deed, but it offers more protections than a quitclaim deed. A quitclaim deed grants no warranties to the buyer. A real estate attorney and title insurance company are useful for determining title risks that may not be apparent during a transaction involving a special warranty deed.

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