Real estate is transferred via deed. There are different types of deeds; the most common is the Statutory Warranty Deed.
As with all deeds, a seller with sign a statutory warranty deed and deliver it to a buyer, often through escrow, and usually with it being recorded at the county recorder's office.
Sellers should be aware that Statutory Warranty Deeds, in addition to transferring the property to the buyer, create ongoing obligations on the part of the seller.
An owner conveying property to a buyer warrants to that buyer that the property is owned free and clear of any outstanding liens, mortgages, or other encumbrances. Washington identifies the warranties by statute (RCW 64.04.030):
- That the grantor owns and has a right to convey the property;
- That the grantor is free and clear of all encumbrances (mortgages, lines, etc.) other than those disclosed in the deed;
- That the grantee will be able to use and enjoy the property without interference by third parties (quiet enjoyment); and
- That the grantor will defend title to the property against anyone that might claim a right to the property.
A seller's obligations to defend title are not limited by a statute of limitations and the duty to defend can be triggered even for issues that arose prior to the seller acquiring the property.
Rowe v. Klein concerned a claim by Rowe that he owned a portion of Kleins property based on the possession of a portion of Kleins' property that had occurred several years prior to Klein's ownership. The Court agreed and quieted title in Rowe to the possessed portion of property.
Adams had sold Klein the property in 2008 (almost 25 years after the possession had occurred that supported Rowe's adverse possession claim). Although the sale had taken place over six years previously, Klein sued Adams alleging that he had breached the warranty of title.
Adams, no doubt surprised that he could be sued several years after he had sold the property, asserted that the statute of limitations barred the claim. The Court disagreed, finding, in effect, that there is no time bar to claims alleging a breach of the warranty of title.
Klein's lawsuit against Adams was allowed to go forward more than six years after Adams had sold the property to Klein for an adverse possession that had occurred more than thirty years in the past!
The case can be found at Rowe v. Klein, 2 Wn.App. 2d 326, 409 P.3d 1152 (2018)