Quality of Real Property Deeds Today

GENERAL WARRANTY DEEDS  VS.  SPECIAL (LIMITED) WARRANTY DEEDS

When transferring real property, the Seller (known also as the Grantor), is required to provide a specific warranty to the Purchaser (Grantee, receiving the grant) by issuance of a document known as a deed. 

With sales of foreclosure properties and bank-owned properties today, the buyer should be aware of the quality of the property deed he or she is to receive prior to settlement. 

Noted below are details of General Warranty Deeds and Special or Limited Warranty Deeds.  In many cases, the deed given by the bank, mortgage firm, or foreclosure owner to the purchaser (grantee) is a Special or Limited Warranty Deed.

The highest form of deed to be received is the General Warranty Deed.
In receiving this deed, the grantee will have the fullest protection and warranty against title defects and will receive the highest quality of title.  The grantee receives 5  warranties (covenants):

    1-The grantee is guaranteed that the grantor owns the property with the right to convey to the grantee the rights of ownership.
       (Covenant of Seisin)

    2-The grantee is guaranteed that there are no encumbrances against the property, except those which may be noted in the deed.
       (Covenant Against Undisclosed Encumbrances)

    3-The grantee is guaranteed that there are no superior claims or right(s) to the property by any other persons or entities.
        (Covenant of Quiet Enjoyment)

    4-The grantee is guaranteed that if a superior claim to title would arise, the grantor will do whatever is necessary to deliver clear title.  (Covenant of Further Assistance)

    5-The grantee is guaranteed that if a title claim cannot be cleared, the grantor guarantees monetary compensation for the loss.
        (Covenant of Warranty Forever)

If a grantee receives a Special or Limited Warranty Deed, there is only 1 Covenant.

    1-The grantee is guaranteed that there are no encumbrances against the property, specifically and only those caused the grantor.  There is no guarantee against previous owners.
       (Covenant Against Undisclosed Encumbrances)

NOTE: The Special or Limited Warranty Deed is mostly used by trustees, custodians, agents, and executors.