When it comes to purchasing real property, there are a number of different types of deeds that may be tendered. A deed is a legal document that confers ownership, and there are three main types: the quitclaim deed, the general warranty deed and the special warranty deed. A special warranty deed is a statutory concept that confers ownership in real property with a limited number of assurances about the seller's ownership in the property being conveyed.
When buying real property, title is often transferred with some assurances as to the validity of that title. Quitclaim deeds provide no assurances — they convey whatever interest the seller actually had in the property irrespective of what was conveyed, verbally for example, to the buyer in the sale process. Other causes of action, like misrepresentation, may be available to the buyer, but the title that is conveyed will simply be what the owner actually had at the time of the sale.
A general warranty deed is usually the ideal type of deed from the buyer's perspective. It comes with five "usual covenants for title," which include the covenant of seisin, the covenant of the right to convey, the covenant against encumbrances, the covenant for quiet enjoyment, and the covenant of warranty. A sixth covenant, the covenant for further assurances, is usually included in general warranty deeds though it's not considered an usual covenant for title.
The quantity of assurances of a special warranty deed lies in between its quitclaim and general warranty alternatives. For this reason, it may also be called a limited warranty deed. The concept is created statutorily, and therefore the specifics of this type of deed may vary among US states. What such deeds include may also vary based on the particular terms of a particular special warranty contract.
Generally speaking, these deeds only protect the buyer from defects in the title caused by the seller, and they do not assure the buyer that defects in the title that were caused by previous owners will be corrected. In other words, special warranty deeds only include the covenant of seisin, the covenant of the right to convey, and the covenant against encumbrances caused by the seller. The other four covenants for title included in general warranty deeds, as well as any encumbrances caused by people other than the seller, are not usually included.
Since such deeds are limited in the assurances they provide, sellers in these transactions are not responsible for correcting title defects or any visible or invisible encumbrances that were present when the seller initially received the property. They may be used in any number of circumstances, but they are most commonly employed in property transactions where the seller did not own or occupy the property for a significant period of time.
