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. Commercial Real Estate Loan

    definition of a commercial real estate loan
Related Articles
  1. Five Things to Know About Quitclaim ...
    Home & Auto

    Five Things to Know About Quitclaim ...

  2. Understanding Property Deeds
    Home & Auto

    Understanding Property Deeds

  3. 10 Steps For First-Time Home Buyers
    Home & Auto

    10 Steps For First-Time Home Buyers

  4. Arm's Length Transaction
    Investing

    Arm's Length Transaction

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center