How a Florida Special Warranty Deed Form Works
A Florida special warranty deed form is a type of deed that provides a limited warranty of title. When a person transfers property by special warranty deed, he warrants that he or she has done nothing that would affect his or her ability to convey good title to the transferee. The warranty provided by a special warranty deed is limited to the time that the transferor owned the property.
Other Names for Florida Special Warranty Deeds
Although a deed that provides a limited warranty is always called a special warranty deed in Florida, it is known by different names in some other states. In California, a deed that provides a limited warranty is called a grant deed. In Michigan, it is called a covenant deed. In Alabama, it is called a statutory warranty deed. And in other states, it is called a limited warranty deed. All of these terms refer to a deed that conveys property with a limited warranty of title.
Relationship of Special 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 special warranty deed is named after its limited warranty of title. The warranty of title is special (limited) in the sense that it only applies to the period when the person who signs the deed owned the property. It provides no warranty for the period before that person acquired the property. Using the word “special” distinguishes the deed from a Florida general warranty deed, which provides a full warranty of title.
In the sale context, the warranty provided by a Florida special warranty deed is usually supplemented by title insurance. Title insurance allows the parties to shift risk from the current owner to the insurance company. This is often preferable for both the transferor and the transferee. The transferor can convey the property without worrying that some unknown title issue will lead to future liability. The transferee feels better knowing that a professional insurance company has reviewed title to the property and will pay if a defect in title is later discovered. Because of the role of title insurance, the decision about whether to use a special warranty deed or general warranty deed is not as important as it once was.
Title insurance is required by almost all lenders and most buyers. It provides an added layer of protection by giving the buyer and the lender an insurance policy that covers any issues with title to the property, including those that arose earlier in the chain of title.
Comparison of Florida Special Warranty Deeds to Other Forms of Florida Deeds
The warranty of title provided by a Florida special warranty deed form is a middle-ground alternative to the assurances provided by Florida warranty deeds and Florida quitclaim deeds.
A Florida general warranty deed form (also called a statutory warranty deed form) provides an absolute warranty of title. It guarantees that no one has done anything that would prevent the transferee from acquiring good title to the property. This warranty covers everyone in the chain of title, not just the current owner.
A general warranty deed form differs from a Florida special warranty deed, which only guarantees that the current owner has done nothing that would affect the title. Where a general warranty deed covers all prior owners, a special warranty deed limits its warranty to the current owner of the property (the person conveying the property in the deed).
A special warranty deed form also differs from a Florida quitclaim deed form. A Florida quitclaim deed provides absolutely no warranties of title. When a person acquires property by quitclaim deed, he or she assumes the risk of any defects in title. If it turns out that the person that transferred the property did not own it, the transferee has no recourse against the prior owner.
A Florida special warranty deed form differs from a quitclaim deed form in that it provides a limited warranty of title. Although the warranty does not extend past the time that the current owner acquired the property, the current owner is legally responsible if he or she did anything that would impair title to the property.
Example: Broward conveys property to Duval using a special warranty deed. After the conveyance, Duval learns that the person who sold the property to Broward had tax liabilities that resulted in a tax lien against the property. Because the tax lien arose before Broward owned the property, it is not covered by the warranty provided by a special warranty deed. Duval has no recourse against Broward.
Had Broward used a general warranty deed to convey the property to Broward, the earlier title issue would have been covered by the full warranty. Duval could have sued Broward for breaching the warranty of title.
The term special warranty deed deals only with the warranty of title. It does not address when title is transferred to the new owner. Some deeds—like Florida life estate deeds and Florida lady bird deeds—do not take effect until death. These deeds are named after their probate avoidance benefits and not after the warranty of title. Because these names refer to different features, they are not mutually exclusive. The same deed may be both a special warranty deed and a lady bird deed.
Common Uses of Special Warranty Deeds
Florida special warranty deeds are often used when property is being conveyed by a fiduciary, such as a trustee of a living trust. Because trustees do not have the power to convey title by general warranty deed, special warranty deeds are the preferred option. Other fiduciary conveyances include deeds from personal representatives of deceased owners, guardians, or bankruptcy trustees.
Special warranty deeds are also used to transfer property to an LLC owned by the same person that previously owned the property. This could help provide continuity of title coverage if a title policy was purchased by the prior owner.
Special warranty deeds are also commonly used in the foreclosure context, where the property is being conveyed back to the lender or to a new owner in a foreclosure sale. Special warranty deeds may also be used in the sale context when money is changing hands for the property.
How to Create a Florida Special Warranty Deed
A Florida special warranty deed is created by including special granting language in the vesting clause of the deed and defining the warranty in more detail in the warranty clause of the deed. In Florida, the language in the vesting clause is typically based on the form of warranty deed described in Florida Statutes § 689.02, with modification to account for the fact that a special warranty deed (and not general warranty deed) is being created. The warranty clause will usually specify that the warranty is limited to the period “when the claim is by, through, or under Grantor, but not otherwise.”
A Florida special warranty deed form must also meet the other requirements for Florida deeds, including a statement of consideration, a description of the manner in which co-owners will hold title, font size and page format requirements, and signature and notarization requirements. Like legal descriptions, the warranty language included in the deed must be exact. And, as with all deeds, it is important to draft the deed to meet Florida recording requirements. Failure to satisfy recording requirements could cause the document to be rejected or result in additional recording fees as a non-compliant document.
Because of the risks of imprecise language, it is important to use a document designed to comply with Florida law. The deeds created by our Deed Generator were designed by licensed Florida attorneys to use the state-specific language required to match the warranty.