Warranty of Title

AAA

DEFINITION of 'Warranty of Title'

A guarantee by a seller to a buyer that the seller has the right to transfer ownership and that no one else has rights to the property. In addition, a warranty of title may be used to guarantee that no other party has copyright, patent or trademark rights in the property being transferred.

INVESTOPEDIA EXPLAINS 'Warranty of Title'

A formal warranty of title is included in a warranty deed, which is used to legally transfer property in a sale. This document guarantees that the seller has the legal right to transfer the property and that no other entity, such as the Internal Revenue Service or an ex-spouse, has a lien against or claim to the property. A warranty deed’s warranty of title protects the buyer’s interests and gives the buyer legal recourse if any entity later tries to make a claim to the property.

A warranty of title is automatic in most sales, but if the seller is acting as a representative, no warranty of title may exist. This situation might arise in an auction, a sheriff’s sale or an estate sale. In these cases, the person selling the property is not its owner and therefore may not be aware of any other entity’s rights in that property.

 

 

RELATED TERMS
  1. Quitclaim Deed

    A deed releasing a person's interest in a property without stating ...
  2. Deed Of Surrender

    A legal document that transfers property ownership for a specified ...
  3. Express Warranty

    An agreement between the contract seller (dealer, manufacturer ...
  4. Implied Warranty

    Under a sales contract, whether written or oral, there is a guarantee ...
  5. Special Warranty Deed

    A special warranty deed is a deed in which the seller warrants ...
  6. Fair Housing Act

    This law (Title VIII of the Civil Rights Act of 1968) forbids ...
RELATED FAQS
  1. What is the difference between adjusted and regular funds from operations?

    While regular funds from operations measures the cash flow generated by the operations of a real estate investment trust ... Read Full Answer >>
  2. What are examples of typical leasehold improvements?

    Typical leasehold improvements include partitioning a large, open space into smaller, more structured areas such as dressing ... Read Full Answer >>
  3. How much of the global economy is comprised of the real estate sector?

    The commercial and residential real estate industry generated an estimated $3 trillion in 2014, with some 35% of sector revenue ... Read Full Answer >>
  4. What is the process for a building owner depreciating leasehold improvements in a ...

    As long as the building owner is the person or entity that provides leasehold improvements, then the owner can depreciate ... Read Full Answer >>
  5. How can I invest in tax liens?

    An individual can invest in tax liens by identifying available liens and then participating in auctions where property tax ... Read Full Answer >>
  6. What kinds of real estate transactions use triple net (NNN) leases?

    A net-net-net lease, also known as a triple net or NNN lease, is a type of real estate lease that requires the tenant to ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Five Things to Know About Quitclaim Deeds

    If that property you're about to buy has a quitclaim deed, check very carefully before you hand over your cash.
  2. Home & Auto

    Understanding Property Deeds

    We help you figure out the terminology and types of deeds, and how to make it legal.
  3. Entrepreneurship

    How Grant Cardone Built a $350M Real Estate Empire

    Sales trainer Grant Cardone built his multimillion-dollar real estate empire without raising external capital from anyone beyond his close family members, who own less than 2% of the Cardone ...
  4. Home & Auto

    When Is the Best Time for You to Buy a House?

    Making what is likely to be the single most expensive purchase of your lifetime shouldn’t be done on a whim.
  5. Investing

    Where Are Real Estate Stocks Heading?

    We summarize five economic reports that investors should monitor monthly to keep them informed of where real estate and its related stocks are heading.
  6. Investing

    Looking for Alternatives to Invest in Real Estate?

    There are several ways to invest in “real estate” via the stock market, buying stocks and hold them for years. We give you 5 ways to invest in real estate.
  7. Home & Auto

    10 Things Your Real Estate Broker Won't Tell You

    Whether you're selling a home or buying one, go in with eyes wide open when you're working with a broker.
  8. Investing

    Find the Private Island of Your Dreams

    The perks, the problems and the pleasures of owning your own little piece of paradise.
  9. Investing

    Can I Afford To Buy A Private Island?

    It may not be as pricey as you think, but don't forget to pay attention to the rights you're buying and, perhaps, factor in the cost of building a house.
  10. Taxes

    5 Signs It's Time to Hire an Estate Manager

    If managing multiple properties (or just one large estate) is taking up too much of your time, you can hire your way back to sanity.

You May Also Like

Hot Definitions
  1. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  2. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  3. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  4. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  5. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
  6. Himalayan Option

    An exotic equity option belonging to a class known as mountain range options. Himalayan options are based on a basket of ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!