Warranty Deed: Legal doc that conveys clear title

There are 2 types of warranty deed used for title transfer. These are given below:

General Warranty Deed:
The legal document guarantees that the grantor (or seller) is the legal owner of the property and no other person has an interest in the same property unless otherwise stated on the deed.

The guarantee offered through the General Deed is not limited to the time period for which the grantor owned property. This implies that the grantor can be held liable for title problems existing prior to as well as during his ownership.

• How it protects the grantee…
  
  The General Deed includes 6 forms of covenants (agreements between the parties involved) divided into the following categories:
  
  
  1. Present Covenant: This represents the grantor's promise that he has legal hold over the title and possession and can claim both when required. The grantor's promise that the title is clear and free of lien is also a part of this covenant.
  
  
  2. Future Covenant: This includes the grantor's promise to protect the grantee against any other person claiming title. Secondly, the covenant represents the grantor's promise to provide legal docs required to prove that the title passed on is valid. However, not all states (eg. Ohio) recognize the second covenant.


• When grantor is held liable…
  
  If the grantee finds out that someone else owns interest in property, which is not disclosed in the deed, then he has the right to sue the grantor. Besides, if there is a cloud or defect in property-title such as tax lien, mortgage claim, judgment etc, then the grantee or buyer can hold the grantor or seller liable.

Special or Limited Warranty Deed:
The Special/Limited or Statutory Warranty Deed does not offer as much protection as the General deed.

• How it protects the grantee…
  
  The deed conveys grantor's title to the grantee and protects the latter against title defects or claims arising during the period of ownership of the grantee and not prior to his ownership (unlike the general deed). The grantor warrants that there are no liens on the property unless otherwise stated on the deed.
  
  The Special Warranty Deed allows the grantee or buyer to ask the grantor for compensation to fix problems with the property which actually originated during the grantor's ownership in the property. And this may help the grantee save a lot of money in case he can prove that the problem existed from the time of grantor's ownership.

The deed should provide the legal description of the property to be transferred. It should be drafted as per the laws in the state where the property is located. Moreover, the deed should be signed and witnessed by legal professionals. Check out a sample form given below in the Related References section.

In case of a buying/selling transaction, the deed is delivered to the buyer at the time of closing. The buyer then records the deed at the County Recorder's office. The deed should be recorded within a specific period as required by the state laws so that it can be considered as valid.