A previous post discussed a seller's lasting warranty obligations when conveying real property with a statutory warranty deed.
When conveying property via warranty deed, a seller is creating ongoing warranties that can be triggered long after the property has been transferred for incidents that occurred long before the seller even owned the property.
Sellers wishing to avoid the far reaching and long lasting warranties can, if the buyer is willing to accept one, use other deed forms that put limits on the warranties.
- Bargain and Sale Deed. The most common alternative to a statutory warranty deed, a bargain and sale deed includes promises by the grantor that are limited to the time the grantor owned the property. The grantor makes no guarantees about any title issues that arose before the grantor acquired the property.
- Special Warranty Deed. Similar to the bargain and sale deed, except that the warranties will be stated or listed in the deed instead of defined by statute.
- Quit Claim Deed. Provides no warranty of title. Grantee takes title "as is" with no recourse against the grantor (even if the grantor didn't own the property at all!).
Most transactions close with a Statutory Warranty Deed signed and delivered by the grantor to the grantee. Indeed, with such a significant investment, most grantees will require that transfer to be via Statutory Warranty Deed. Sellers should be aware of the warranties that they are giving and should only make them after some deliberation and consideration of possible alternatives.