How a California Warranty Deed Form Works
A California warranty deed form is a special form of deed that guarantees that the transferor has clear title to the property being conveyed. A California warranty deed form contains special language that spells out the warranties of title.
Other Names for California Warranty Deeds
In some states, the equivalent of a California warranty deed is called a general warranty deed. This is often done to distinguish warranty deeds, which provide a full warranty of title, from special warranty deeds or limited warranty deeds, which give a limited warranty of title. The word “general” is not necessary in California because California deeds that provide a limited warranty of title are called grant deeds.
Relationship of Warranty Deed Form to Warranty of Title
Key Term: Warranty of Title. Title issues can be caused by many things, including errors in the public record, unknown liens against the property, undisclosed prior conveyances, forged deeds, missing heirs or unprobated wills, or disputes about boundary lines or surveys. Title issues often require legal action to fix and can decrease the value of real estate. If the property has no title issues, it is said to have clear title. A warranty of title is a legal guarantee from the transferor to the transferee that there are no title issues. If a deed makes a warranty of title, the transferee can sue the transferor over any title issues.
A warranty deed provides a full warranty of title which is defined by the terms of the deed. Because the guarantees in a warranty deed are stated in the deed itself, warranty deeds can be custom-designed to include only the warranties that the drafter wants to add. These warranties are often called covenants. Common covenants include:
- Covenant of Ownership – A guarantee that the transferor legally owns the property being transferred.
- Covenant of Right to Convey – A guarantee that the transferor has the right to transfer the real estate.
- Covenant of Warranty and Quiet Enjoyment – A guarantee that the transferor will ensure that title is clear and that the recipient may use (enjoy) it.
- Covenant Against Encumbrances – A guarantee that the real estate is free from all deeds of trusts (mortgages), liens, or other encumbrances other than those that are specifically disclosed.
- Covenant of Further Assurance – A guarantee that the transferor will take any future action needed to give effect to the other covenants.
The deeds prepared by our Deed Generator include each of these covenants.
Comparison of California Warranty Deeds to Other Forms of California Deeds
A warranty deed differs from a California quitclaim deed form. It includes a full warranty of title that guarantees that there are no title defects. By contrast, a Quitclaim Deed contains no warranties of title.
A warranty deed also differs from a California grant deed form in two ways. First, a warranty deed includes a blanket guarantee that the transferor has clear title. A grant deed has a more limited warranty. A grant deed only guarantees that the transferor has done nothing to cause a title defect. The warranty in a grant deed does not apply to anything that happened before the transferor acquired the property.
Example: Jake owns a parcel of real estate in Alameda County. Unbeknownst to Jake, the person Jake bought the property from did not own it. This means there is a defect in title that arose before Jake acquired the property. Jake later sells the property to Brett.
If Jake conveys the property to Brett using a grant deed form, Brett would not have a claim against Jake for the title problem. Because the problem arose before Jake acquired the property, and because the warranty in a grant deed does not cover issues that arise before the transferor acquired title, Brett has no legal recourse against Jake.
If Jake conveys the property to Brett using a warranty deed form, Brett would have a claim against Jake for breaching the warranty of title. A warranty deed form covers all defects—even those that arose before the transferor acquired the property.
The second difference between a warranty deed and a grant deed is the nature of the warranty. When a person transfers California real estate using a grant deed, the terms of the warranty are not specified in the grant deed itself. Instead, the warranty of title is implied under California Civil Code § 1092. But when the transfer is by warranty deed, the warranty is spelled out in the warranty deed. This is known as an express warranty.
California warranty deeds also differ from other types of deeds that are named after features other than the warranty of title. For example, California life estate deeds and California transfer-on-death deeds are both named after their probate avoidance features. Because these names relate to different features, the same deed can be known by different names. For example, a California warranty deed may also be a California life estate deed.
Common Uses of Warranty Deeds
Warranty deeds are seldom used in California, where grant deeds are more popular. The guarantees provided by a warranty deed have mostly been replaced by title insurance, which is viewed as a better alternative (especially in the sale context). Title insurance insures against any financial loss that the transferee may incur due to defects in title to the property. Title insurance is usually a win-win for both the transferor and the transferee.
- Transferors like title insurance because it shifts risk from the transferor to the title insurance company. If it turns out that there is a problem with title, the title insurance company bears that risk instead of the transferor.
- Transferees like title insurance because it provides more financial security than the warranty provided by a warranty deed. Instead of having to track down and sue the transferee (who may declare bankruptcy or otherwise lack resources to honor the warranty), the transferee can file a claim against a title insurance company.
In commercial real estate transactions, buyers may insist that the transferor convey title by warranty deed. But outside of the commercial setting, the assurance provided by general warranty deeds has mostly been replaced by title insurance.
How to Create a California Warranty Deed
In some states, the warranties provided by a warranty deed are defined by statute. This is not the case in California. Instead, the warranties provided by a California warranty deed are described in the body of the deed itself. This requires careful attention to ensure that the warranties are spelled out. Failure to include the right language could result in a different deed.
The granting language used in California warranty deeds must also be carefully drafted. Including the wrong language can result in a different type of deed. For example, using the word “grant” in the vesting paragraph could result in the creation of a grant deed under California Civil Code § 1092.
In addition to the right warranty and vesting language, California warranty deeds must also meet the general requirements that apply to California deeds. These requirements include a valid legal description, statement of consideration, and a description of the manner in which co-owners will hold title. Warranty deeds must also meet font size and page format requirements, as well as signature and notarization requirements.
When transferring California real estate by warranty deed, it is important to use the correct language. Incorrect language can result in contradictions in language (known as patent ambiguities). Patent ambiguities usually require legal action to clear title. This risk can be avoided by using a warranty deed form that meets the requirements of California law. The California warranty deeds created by our Deed Generator were designed by attorneys to meet the requirements of California law.