Different Types of Deeds
Ask the Real Estate Lawyer: Real Estate Law Q&A
REM ## LAW 698
By Ilyce R. Glink and Samuel J. Tamkin
Summary: A reader is wondering if a general
or special warranty deed should be used for selling their property. Sam and
Ilyce discuss the different types of deeds and suggest how this reader should
move forward with the sale of her property.
Q: When selling property, is it better to give the buyer a general warranty
deed or a special warranty deed?
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A: For all practical purposes, it probably won’t matter to you what kind
of a deed you use when transferring residential property to a buyer.
A general warranty deed will convey title to a buyer along with certain warranties
of title from you, the seller, to the buyer. If it turns out that you sold the
home and never really owned the home, the seller can sue you for breach of warranty
given to the buyer under the deed.
A special warranty deed is generally used in commercial transactions, but an
individual could also use that form. The difference between the general warranty
and special warranty deeds is that the warranty in the special warranty deed
only applies to items that occurred while the owner owned the property. Here
again, if the seller never really owned the property, the buyer could sue the
seller for failing to convey title to the buyer.
But if there is a problem on the title to the property that occurred prior
to the seller’s ownership of the home, the buyer could sue the seller
for the breach of the warranty under the general warranty deed but not under
the limited warranty deed.
However, the distinction between the two in residential transactions is technical
and in practice it would rarely come up. With title insurance companies and
most home buyers obtaining a title insurance policy, the process has become
computerized and the records have improved. If there is something that affects
a homebuyer’s title, the title company should have discovered it prior
to closing. If the title company discovered it prior to closing and the closing
agent or selling attorney listed that item on the deed, the distinction between
the general or limited warranty deeds becomes irrelevant.
Finally, most practitioners will expect a general warranty deed from a seller
and may become apprehensive if a limited warranty deed is delivered or even
a quitclaim deed. A quitclaim deed makes no warranty as to what the seller is
conveying. The seller may own nothing or may have good title. But if the seller
owns good title, the buyer gets good title.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce
R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your
Home Faster and For More Money In Any Market. If you have questions for
them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022
or contact them through Ilyce’s website www.thinkglink.com