Special Warranty Deed

What is 'Special Warranty Deed'

A special warranty deed is a deed in which the grantor warrants the title against defects in clear title occurring only during their ownership of the property. The grantor of a special warranty deed does not provide a warranty or guarantee against any defects in clear title that existed before their ownership. A special warranty deed is a variation of the more commonly issued general warranty deed.

The use of the word "special" may communicate to a buyer the idea that the deed is of higher quality than a general warranty deed. In fact, the special warranty deed is less comprehensive as it offers less protection against possible defects in a clear title.

The Differences Between General and Special Warranty Deeds

Transfer of ownership or title to commercial or residential real estate property comes with certain guarantees made by the seller. The seller guarantees the title to the property is being transferred free and clear of ownership claims or other encumbrances by individuals or entities other than the seller.

A general warranty deed is the most common and preferred type of instrument used to transfer real estate property in the United States. A general warranty deed guarantees the property is free and clear from any defects or encumbrances. The general warranty deed assures the buyer they are obtaining full rights of ownership without valid potential legal issues with the title.

Both general and special warranty deeds provide a guarantee that the seller owns the title and is free to sell the property. The seller also warranties the property to be free of debt or encumbrances noted in the deed, and if not, the seller is responsible for any title defects.

With a special warranty deed, the title warranty is only for the period during which the seller held title to the property.  Special warranty deeds do not provide a guarantee against any mistakes in a free and clear title that may have existed before the seller's ownership of the property. Thus, the grantor of a special warranty deed is only liable for debts or other encumbrances to the title which they caused, or which happened during their ownership of the property.

Commercial property will more commonly use special warranty deeds. Single-family and other residential property will usually use a general warranty deed.