A deed is a legal document that is used to transfer ownership of real property from an owner (grantor) to a buyer (grantee). Most real estate transactions use one of four types of deeds to convey title. There are distinct differences between them, and each type serves its own purpose. Each type of deed includes certain promises, or warrants, that a grantor makes to the Grantee to defend against claims by third parties. If you are involved in a real estate transaction and have questions about a deed or title, an experienced Pennsylvania real estate lawyer can help you understand which type of deed applies in your case and ensure your interests are protected.
General Warranty Deed
This type of deed provides a high degree of protection for the grantor because it contains the broadest range of warrants on behalf of the grantor. A general warranty deed promises that the Grantor owns and/or has a legal right to sell the property, and that it is free and clear of any debts, liens, or encumbrances. In a general warranty deed, the grantor promises to defend against claims against the property “generally.” This means that the seller will defend against a claim of superior rights from anyone and everyone, even if the person or entity claims that their rights supersede the grantor’s.
Special Warranty Deed
This type of deed does not offer as much protection for the buyer. There are only two promises in a special warranty deed – that the seller holds title to the property, and that the property was not encumbered during the seller’s period of ownership. However, a special warranty deed does not guarantee that the property was unencumbered before the seller took ownership. Special warranty deeds are common in cases involving the transfer of property by a trust of estate and in commercial real estate transactions. All real estate deeds must be in writing and are usually prepared by the seller’s real estate attorneys.
Bargain and Sale Deed
With a bargain and sale deed, a buyer gets no protection from encumbrances. It simply states that the owner holds title to the property. If title issues arise at a later date, the buyer would have no legal recourse because a bargain and sale deed does not guarantee good title general warranty and special warranty deeds do. This type of deed is often used in foreclosure actions or tax sales when the history of a property is unknown. Because the grantor is typically a lender or taxing authority in these types of situations, they may not know whether the property ever had encumbrances, liens, or debts against it.
The uses of a quitclaim deed are very limited, as it does not provide any protection to the grantee or guarantee that the grantor has any interest to convey. It simply transfers ownership from the buyer to the seller. Quitclaim deeds are often used when property is transferred from one spouse to another in a divorce. Presumably, a married couple would acquire the property by general warranty deed so they would already know everything that has happened with it since then. If you are facing a battle over property, your divorce lawyer can advise you on whether a quitclaim deed would be applicable in your case.
Do you need assistance with a property deed or title? Our West Chester real estate attorneys can ensure your rights are protected and all your legal bases are covered.