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.
Comparison to General Warranty Deeds and Quitclaim Deeds
The warranty of title provided by a Florida special warranty deed form is a middle-ground alternative to the warranties 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 that is 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 actually 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.
Common Uses of Florida 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 commonly used in the foreclosure context, where 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.
The warranties provided by both general warranty deeds and special warranty deeds have largely been replaced 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.