Types of Deeds: Warranty, Special Warranty, Quitclaim

What a deed is

Cornell’s Legal Information Institute defines a deed as “a legal document that grants ownership to a piece of real estate or other property asset.” In a home sale, it is usually delivered at closing.

A valid deed for real estate must be in writing. Requirements differ by state. In Washington, every deed must be “in writing, signed by the party bound thereby, and acknowledged” before a person authorized to take acknowledgments.

Cornell lists elements generally required: the names of the grantor (seller) and grantee (buyer), words of conveyance, a legal description of the property, and a statement of consideration. After closing, the purchase contract merges with the deed, and the buyer can generally sue only on the warranties in the deed.

The three main types compared

Washington also has a bargain and sale deed (RCW 64.04.040), whose covenants are limited to encumbrances “done or suffered from the grantor.”

General warranty deed

Cornell describes the warranty deed as the type that offers “the highest level of protection to the buyer.” Cornell lists the six traditional covenants of title it carries:

1. Seisin: the seller owns the property;
2. Right to convey: the seller has the right to transfer it;
3. Against encumbrances: there are no undisclosed liens or burdens;
4. Quiet enjoyment: no one with a better title will disturb the buyer;
5. Warranty: the seller will defend the title against lawful claims;
6. Further assurances: the seller will do what is needed to perfect the title.

State law can write these promises into a short form. In Utah, a warranty deed carries covenants that the grantor owns fee simple title, has good right to convey, guarantees quiet possession, that the premises are free from all encumbrances, and that the grantor “will forever warrant and defend the title … against all lawful claims whatsoever.”

In Washington, a deed in the statutory warranty form carries three covenants: lawful ownership and the right to convey, freedom from encumbrances, and quiet possession with a duty to defend title.

Special warranty deed

A special warranty deed narrows the promise to the seller’s own period of ownership. Cornell notes it “does not offer any protections or guarantee against any title defects that existed before the seller owned the property.”

Utah codifies it: the grantor covenants that the property is free from encumbrances “made by that grantor” and defends title only against claims by “any person claiming or to claim by, through, or under the grantor.” Cornell notes these deeds are common in commercial transactions, where parties typically rely on title insurance.

Quitclaim deed

A quitclaim deed conveys the grantor’s present interest, “if any,” without “representing, covenanting, or warranting that the title is good,” per Cornell. In Washington, a quitclaim deed conveys the grantor’s then-existing rights but “shall not extend to the after acquired title unless words are added expressing such intention.” In Utah, it conveys all right, title and interest of the grantor “at the date of the conveyance.”

Because the buyer cannot recover from the seller on the deed, Cornell notes that property bought under a quitclaim deed “should have title insurance.”

Quitclaim deeds, family transfers and the mortgage

A quitclaim deed can be used to move title between people who already know the history of the property, such as spouses. Two points to check before signing one:

• The deed does not change the loan. A deed transfers ownership; the mortgage is a separate contract secured by the property. Removing your name from the title does not, by itself, remove you from the loan. Ask the lender about a release, an assumption or a refinance.
• Due-on-sale clauses. A due-on-sale clause in a mortgage lets the lender demand full repayment if the home is transferred. Federal law (12 U.S.C. 1701j-3(d)) bars lenders from enforcing that clause, on homes of fewer than five dwelling units, for transfers including: to a spouse or children of the borrower who become owners; to a relative after the borrower’s death; on the death of a joint tenant or tenant by the entirety; under a divorce decree or legal separation agreement making the spouse an owner; and into a living (inter vivos) trust in which the borrower remains a beneficiary, if occupancy rights do not change.

Gift, estate and property tax effects of a transfer depend on the facts and on state law.

Recording and title

Recording puts the public on notice of ownership. Cornell explains that a deed “is usually recorded in the local county clerk’s office” and that recording “puts the public on constructive notice as to the buyer’s ownership.” The office that records deeds in each state is listed in how to find out who owns a property.

The consequences of not recording depend on state law. In Washington, an unrecorded conveyance “is void as against any subsequent purchaser or mortgagee in good faith and for a valuable consideration” whose conveyance is recorded first. An instrument “is deemed recorded the minute it is filed for record.” Recording fees and transfer taxes also vary (see local transfer taxes and closing costs).

Title insurance is a separate protection. The CFPB notes that title insurance “can provide protection if someone later sues and says they have a claim against the home,” and that lender’s title insurance “is usually required to get a mortgage loan.” See title insurance explained.