Deeds and Titles
What is a Warranty Deed?
A warranty deed is a common form of deed for conveying real estate.
While warranty deeds can vary by jurisdiction, they typically contain all the standard deed elements, including who is granting the property, who is receiving the property, what the consideration is, and the description of the property. They may also come with a variety of additional restrictions depending on the jurisdiction.
The key here is that warranty deeds add one important element: the warranty.
Why the Warranty Matters
That said, with respect to the specific title being conveyed, a warranty deed is a powerful protection for the grantee. In making the warranty, the grantor is guaranteeing that no one else can claim the title they are conveying. If someone does make such a claim, the grantor will step in and defend the grantee from that claim.
This warranty is important as a means of ensuring that the seller is being as forthcoming as possible with regard to their ownership. The grantor’s obligation to defend the grantee in the event of a claim places the burden on the grantor to ensure that the grantor’s title is clear.
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What Makes Warranty Deeds Different
Warranty deeds differ from other types of deeds because of this guarantee. Grant deeds, for example, only imply ownership of title and provide no explicit defense for the grantee if a problem were to arise.
On the other hand, quitclaim deeds provide no explicit or implicit guarantee that the grantor owns anything. Instead, the grantor of a quitclaim is simply conveying whatever they own, which could be nothing. If that is the case, the grantee has no way to recover for their loss against the grantor because all the risk was placed on the grantee by the form of the deed.
The warranty shifts the risk explicitly to the grantor, giving the grantee peace of mind that they will have somewhere to turn if the grantor’s title turns out to have issues.
Conclusion
Warranty deeds can be great tools for buying and selling real estate, but there are a couple of things to keep in mind.
As a grantor, it is important to ensure that your title is as clear as you can make it if you are going to convey your title through a warranty deed. As a grantee, if you are offered a warranty deed, you should know your rights under the warranty and how to pursue them.
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