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Warranty Deed: Legal doc that conveys clear title

Posted on: 29th Jun, 2004 02:35 am
A warranty deed is a legal instrument that is used to transfer the title of a property from one person (grantor) to another (grantee). The most important feature of this deed is that here the grantor promises that the title is clear and free of liens. One major benefit of this deed is that it provides protection to you as the grantor warrants that he/she is the owner of the property and the property is free of outstanding liens.

What are the types of warranty deed?

There are 2 types of warranty deeds used for title transfer. They are:

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

The guarantee offered in the General Deed is not limited to the time the grantor owned property. The grantor can be held liable for any title problems existing before they owned the property, as well as during ownership.

  • How it protects the grantee -
    A General Deed includes 6 types of covenants (agreements between the parties involved) divided into the following categories:

    1. Present Covenant: This represents the grantor's promise that he has legaltitle and possession to the property. The grantor's promise that the title is clear and free of any liens is also part of this covenant.

    2. Future Covenant: This includes the grantor's promise to protect the grantee against any other person claiming title. In some states, this covenant protects the grantor's promise to provide the legal documents necessary to prove that the title passed by the deed is valid.

  • When grantor is held liable -
    If the grantee finds out that someone else owns interest in property that was not listed in the title record, then they have the right to sue the grantor. If there is a defect in property-title such as a tax lien, mortgage claim, judgment, etc, then the grantee or buyer can hold the grantor or seller liable if the defect was not present in the title record.
2. 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 only during the grantor's ownership. The grantor warrants that there are no liens on the property unless otherwise stated on the deed or present in the title record.

    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 if they are guaranteed by the grantor. If a defect in the condition of the property is not warranted in the deed or disclosed prior to closing, then the grantor is not liable for it.

How do you make the deed valid?

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

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 the specific period required by state law in order to be valid.

A Warranty Deed offers greater protection than a quitclaim deed. So, whether you're selling property or transferring it to a trust, this kind of deed can serve you the best. When purchasing property, the buyer should supplement the deed by purchasing title insurance policy. Both the deed and the policy can help protect the lender and the buyer against disputes concerning ownership or liens on property.

Related Forum Discussions

Related References

my wife wants to add my name on a title to her home. i think that all we need to do is record a quit claim deed from my wife to my wife and me. what are your thoughts?
Posted on: 16th Dec, 2005 12:39 am
Hi,

First of all let me inform you that a deed of trust is not a deed of conveyance and most of the title companies will need a warranty deed from your wife to you and your wife. And secondly you should confirm from the title company that the title insurance policy is not affected by your acquisition of an interest in the property.

Thanks,
Jerry
Posted on: 16th Dec, 2005 12:45 am
My mom want to transfer her home to me and my brother. What is the best way to go without the taxes being affected and will we (grantees) be able to claim the property on our taxes?
Posted on: 14th Aug, 2006 10:16 am
Hi,

I think the property transfer to you and your brother's name will allow you to make such a claim.

Andrew
Posted on: 14th Aug, 2006 10:44 am
Hi,

Your mom can try out with a warranty deed which will transfer the title to you ensuring that there is no debt against it. For this deed, you may have to carry out a title search to find out whether the title is free from any lien. A title company or escrow company will be able to guide you in this matter. Regarding the taxes, consult a tax advisor for clarifying your doubt.

Thanks,

Caron.
Posted on: 14th Aug, 2006 09:02 pm
My son bought a house and now he does not want it, he would like for my husband to take over the payments. Is this possible and if it is, could the house be put in our name instead of our sons?
Posted on: 24th Sep, 2006 12:05 pm
Hi Lou,

A similar query has been answered at http://www.mortgagefit.com/know-how/about5090.html . Please go through it.

Thanks,

Caron.
Posted on: 24th Sep, 2006 08:59 pm
My sister has terminal cancer. She is on Medicaid. I loaned her the money to pay off her mortgage. Can we use a quit claim deed as collateral in the event she is unable to pay back the loan? If a quit claim deed exists, can Medicaid attach the home should she owe Medicaid money for long term care?
Posted on: 30th Sep, 2006 12:34 pm
Hi Herminia,

Sorry to hear about your sister's cancer.
"Can we use a quit claim deed as collateral in the event she is unable to pay back the loan?"
If she is unable to pay back the loan you had given her for payment of the mortgage, you can ask her to transfer the property interest in your name by way of a quit claim deed.

Veolin
Posted on: 30th Sep, 2006 11:49 pm
Hi Herminia,

If your sister receives medical services paid through Medicaid on or after her 55th birthday, or if she resides in a medical institution permanently, then only Medicaid can attach the house. This implies that Medicaid can recover the cost of medical services from the assets in the home upon your sister's death. So, if your sister is 55 years old or above, the quit claim as collateral has no value as the Medicaid company if required can claim the house. But if she is under the given age limit, then the quit claim can be effective.

Thanks
Posted on: 03rd Oct, 2006 02:33 am
My sister asked me to remove her from our home deed. She may have some medical bills due to an illness in the near future. Can they take my home if she is not on the title now?
I do have a lein on the home but it is only in my name.
We had a Quit Claims Deed fixed, will this protect me if not what should I do?
Posted on: 09th Nov, 2006 07:20 am
"Can they take my home if she is not on the title now? "
As the home has been quit claimed and your sister is now not on the title of the home, a lien will not be placed on the home for the debts that are going to arise in the future.
Posted on: 09th Nov, 2006 10:15 am
Hi Red,

Welcome to the forums.

I guess you want to know whether your property will be taken away in order to retrieve the unpaid medical bills. Well, I don't think it will affect your home in any way because the bills are not secured by the property. Moreover, your sister is not on the title. So, those providing the medical treatment have to retrieve the dues from your sister itself.

"I do have a lein on the home but it is only in my name. "
Regarding the lien on your home, you are responsible for it and you need to clear it within the allotted time period. You may lose your home in case you are not able to fulfill the obligations required to clear the lien.

"We had a Quit Claims Deed fixed, will this protect me "
The quit claim can protect you in the sense that it mentions the transfer of title to you. So, the persons concerned will know that you are on the title. I mean you can show them a copy of the deed as a proof of the transfer.

"if not what should I do?"
I think you need to talk to your sister explaining her that she should pay down the bills or else she should be in trouble later on. Moreover, keeping the dues unpaid will have a serious affect on her credit score.

Hope I could help you to some extent.

God bless you

Samantha.
Posted on: 09th Nov, 2006 08:26 pm
I want to buy a bank owned property they will only sell it on quik claim deed. They will not give a warranty deed. Iwant to know what are the risks involved about purchasing ? Do bank own properties not give Warranty deeds ?
Posted on: 29th Nov, 2006 04:43 pm
Hi Vic,

I have already answered to your post in this thread (http://www.mortgagefit.com/know-how/about5840.html). Please refer that.

Thanks
Posted on: 29th Nov, 2006 10:44 pm
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