A Special Warranty Deed, also known as a Limited Warranty Deed, is a type of real property (i.e. land or a building like a house or apartment) deed where the grantor or owner of the property transfers (grants) and warranties title to their portion of interest in the property in which the grantor has title. A Special Warranty Deed is commonly used when a property is transferred between parties unfamiliar to each other as it provides certain warranties or safeguards for the Grantee or buyer against fraud. A Special Warranty Deed provides a guarantee to the buyer that the seller owns the property, has the right to sell the property free and clear of any debt (unless the debt is disclosed in the deed). Unlike a Warranty Deed, where the Grantor will defend the title to the property against any claims whatsoever against the title that resulted from defects under any prior ownership including the sellers' ownership, a Special Warranty Deed only guarantees the title against defects caused during the Grantor's ownership of the property. An example of a potential title claim/defect is a mortgage on the property that has not be satisfied. Without a warranty the Grantee has limited recourse in holding the Grantor liable for the unpaid mortgage. While the Grantee does not become responsible for paying the mortgage the Grantee will likely be unable to sell the property due to the cloud of title caused by the attached mortgage.
** If the Grantor does not desire to provide any guarantees you should consider preparing a Quit Claim Deed.
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According to Fortenberry (2017) of DeedClaim dot com, "A special warranty deed (called a grant deed, covenant deed, or limited warranty deed) is a deed form that transfers property with a limited warranty of title."
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