What is the Meaning of a Warranty Deed?
A warranty deed is a document sometimes used in real estate, which offers the buyer of property the greatest amount of insurance. It guarantees or warrants that the property is owned by the owner free of any unpaid liens, mortgages, or other obligations against it.
The seller or lender, also known as the grantor, and the buyer or the grantee are the two parties involved in a warranty contract. A party may be a person or a company, and they are often strangers.
There are several types of deeds, such as the special warranty deed, the quitclaim deed, and the warranty deed. The disparity between these contracts is generally determined by what warranties and covenants are communicated to the buyer from the seller.
How Does a Warranty Deed Function?
A deed is a significant legal document transferring property from one person to another — often in the case of a transaction related to real estate. The buyer is provided with the highest form of security by a general guarantee deed. Warranty deeds are also put in place while a borrower is seeking to get a mortgage or title insurance financing.
All deeds include the date of the sale, the names of the parties concerned, a description of the exchanged property, and the buyer's signatures. Deeds might need to be signed while a witness and/or notary is present.
The grantor is responsible with a general warranty deed for a violation of certain warranties and assurances, even if the violation happened without his or her knowledge or during a time when the grantor did not own the land.
The general warranty deed puts a great deal of responsibility on the grantor because he or she is responsible for any violations that could have happened well beyond their understanding of property ownership.
What is a Special Warranty Deed?
A special warranty act is not quite as detailed as its generic equivalent, since it conveys only two warranties:
The grantee warrants that the title has been granted to him or her.
The grantor warrants that during the time the grantor held the land, the land was not encumbered.
A special warranty deed does not defend against any lawsuits until the title is granted to the grantee. In the commercial real estate world, special guarantee deeds are usually used.
