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A Warranty Deed is a legal document that transfers property or land from a seller to a buyer. In it, the seller guarantees a piece of real estate’s title is free of defects.
This document is essential for a buyer should a defect arise after purchase because it provides legal recourse.
What Is a Warranty Deed?
You use a warranty deed when transferring ownership of a property. In the deed, the seller guarantees the buyer the seller has the legal right to transfer the property.
Therefore, the seller is called the grantor, and the buyer is called the grantee.
A warranty deed guarantees six covenants, each of which promises something to the grantee.
- Covenant of the Right to Convey: The seller promises he or she has the legal right to transfer the property title.
- Covenant of Seisin: Sellers promise they own the type of estate they offer.
- Covenant Against Encumbrances: The seller promises that the title is free of liens and encumbrances not already identified in the deed.
- Covenant of Further Assurances: The seller promises to rectify any title defects that become known.
- Covenant of Quiet Enjoyment: The seller promises that the buyer’s ownership will not be disturbed by a defect in the title.
- Covenant of General Warranty: The seller promises to defend the buyer against competing claims to the title.
Why Do You Need a Warranty Deed?
You use a warranty deed when exchanging property from one owner to another. Note that it does not guarantee ownership of a property.
Grantors only promise that, to their knowledge, they have ownership of the property and have the right to transfer it to a buyer.
After a transfer, someone may appear and have a valid legal claim to the property.
The warranty deed protects buyers and guarantees they can sue for monetary damages should a title defect challenge property ownership. Without it, there is no recourse.
When Do You Use a Warranty Deed?
A warranty deed transfers the ownership interest in a property from the seller to the buyer. You use it when you want to have the protection of the warranties and covenants conveyed in a warranty deed.
There are two main types of warranty deeds.
- General Warranty Deed: In this warranty deed, the seller promises that the property is free of any defects in the title. It protects the property’s title before and after the seller possesses it.
- Special Warranty Deed: The seller also promises that the property is free of any title defects in this warranty deed. However, the protection only extends after the seller owns the property. The deed does not cover any defect that predates the seller’s ownership.
The type of warranty deed you choose depends on the agreement between parties and how much protection you desire.
What To Include in a Warranty Deed?
The contents of a warranty deed can vary by jurisdiction, but generally, it includes:
- Name and address of the seller/grantor
- Name and address of the buyer/grantee
- Address and legal description of the property
- Purchase price of the property
- Parcel number of the property
- The jurisdiction where the deed is signed
Most jurisdictions also require the signature of the seller/grantor to be notarized.
How to Write a Warranty Deed
Follow the steps below to write a general warranty deed.
Step 1 – Include Seller Name
A general warranty deed must include the seller’s (grantor’s) name.
Step 2 – Write the Buyer’s Name
Include the name of the buyer (grantee).
Step 3 – Write Property Description
The warranty deed must include a legal description of the property (find this on the previous deed).
Step 4 – Enter Grantor Statement
The grantor must state he or she transfers the property to the grantee.
Step 5 – Include Grantee Statement
The warranty deed must include a statement saying the grantor is the property’s legal owner and can transfer it.
Step 6 – Write Legal Claims Statement
Ensure there is a statement saying the property has no legal claims against it.
Step 7 – Enter Guarantee
Write a guarantee that the grantor will compensate the buyer if legal claims emerge.