Hawaii Limited Warranty Deed Form
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What Is a Hawaii Limited Warranty Deed Form?
A Hawaii limited warranty deed form is a legal document used in the state of Hawaii to transfer real estate from a seller (grantor) to a buyer (grantee) while providing a limited warranty of title. This type of deed offers some protection to the buyer but is less comprehensive than a general warranty deed. In a limited warranty deed, the grantor warrants that they have not encumbered the property in any way during their ownership and that they will defend the title against any claims or issues arising during their period of ownership. However, the grantor does not guarantee against any defects or issues with the title that may have existed before they took ownership of the property. This makes a limited warranty deed less protective for the buyer than a general warranty deed, which covers the entire history of the property’s title.
What Is Warranty of Title?
A warranty of title in Hawaii generally guarantees that the title to the property being conveyed is good, marketable, and free from encumbrances. A warranty of title protects the new owner by giving the new owner the right to seek compensation from the grantor if the new owner suffers financial loss caused by a problem with the property’s title.1
Other Names for a Hawaii Limited Warranty Deed Form
Most states refer to a deed that provides a limited warranty as a special warranty deed. The terms limited warranty deed and special warranty deed are synonymous. Courts and lawyers in Hawaii use both, but limited warranty deed is more common in Hawaii. Other states, like California, use the term grant deed. Although a California grant deed doesn’t provide precisely the same limited warranty as a Hawaii limited warranty deed, it does implicitly warrant that the grantor has not previously transferred the title and that the property is free of undisclosed encumbrances.
In a few states, such as New York and Washington, bargain and sale deeds often include limited warranties similar to a Hawaii limited warranty deed, depending on the language used in the deed.
How Do Hawaii Limited Warranty Deed Forms Relate to Other Forms of Deeds?
Hawaii limited warranty deeds are one of three main types of Hawaii deeds that are identified by the warranty of title they provide. The other two deed types are warranty deeds and quitclaim deeds.
Hawaii Warranty Deed Form
A Hawaii warranty deed—also called a general warranty deed—provides the most comprehensive warranty of the three main types of Hawaii deeds. It guarantees that the title is free from any defects, even if the seller is not aware of them. A warranty deed places the most risk on the seller, as its warranty covers title problems that arose before the seller acquired the property.
Hawaii Quitclaim Deed Form
A Hawaii quitclaim deed does not contain any warranties. It conveys whatever interest the grantor has in the property with no promises about the property’s title.2 Quitclaim deeds are often used when actual control of the property will not change or when the parties to the deed have an existing relationship. Quitclaim deeds offer no protection to the new owner.
Hawaii Title Insurance and Limited Warranty Deeds
Title insurance is a separate policy that protects the buyer and/or lender against losses resulting from title defects, liens, or other issues affecting the property’s title that were not discovered or resolved during the title search process. Unlike the limited warranty provided by a limited warranty deed, title insurance can cover the entire history of the property’s title, including issues that arose before the current seller took ownership.
The relationship between a Hawaii limited warranty deed and title insurance lies in the fact that they both address title-related issues but offer different levels of protection. Buyers often obtain title insurance in addition to receiving a limited warranty deed to ensure comprehensive protection against potential title defects. Title insurance provides a safety net for the buyer by guaranteeing a source of compensation if issues with the property’s title surface after the transfer. Title insurance is usually purchased with a one-time payment and typically covers the buyer for as long as they own the property.
Hawaii Limited Warranty Deed Forms and Other Hawaii Deeds Used in Estate Planning
Hawaii limited warranty deeds are named after the warranty of title they provide. Two other types of Hawaii deeds—life estate deeds and transfer-on-death deeds—are named after their probate avoidance feature. Both life estate deeds and transfer-on-death deeds in Hawaii allow for the transfer of property to a beneficiary upon the death of the owner. However, there are some key differences.
Hawaii Life Estate Deeds
A Hawaii life estate deed creates two separate interests in the property: the life tenant’s interest allows them to own the property for life, and the remainderman’s interest allows them to take title to the property upon the death of the life tenant. Life estate deeds are generally irrevocable after they are signed, and they limit the owner’s right to sell or mortgage complete title to the property.3
Hawaii TOD Deeds
A Hawaii transfer-on-death (TOD) deed lets a property owner keep the property for life and name a beneficiary to take title outside probate when the owner dies.4 Unlike a life estate deed, a TOD deed does not create any legal or equitable interest in the property for the beneficiary during the transferor’s life. A TOD deed can also be revoked during the transferor’s life, even if the deed includes a provision saying it is irrevocable.5
Common Uses of Hawaii Limited Warranty Deed Forms
Hawaii limited warranty deeds are used in various real estate transactions to transfer property ownership while providing limited title protection to the buyer. Limited warranty deeds are the deeds most often used for sales of commercial real estate in Hawaii. Other common uses of limited warranty deeds in Hawaii include:
- Sale of property by a trust, estate, or corporate entity. Limited warranty deeds are often used when a property is being sold by a living trust, estate, or corporation, as these entities can only provide a limited warranty of title that covers the time they held the property. This ensures that the buyer is protected against title defects during that period, but the grantor is not held responsible for issues that arose before their ownership.
- Sale of property by a fiduciary or court-appointed representative. In situations where a fiduciary, such as an executor, trustee, or court-appointed representative, is selling the property on behalf of another party, a limited warranty deed might be used because the fiduciary has limited knowledge of the property’s history and cannot provide full title warranties.
- Sale of a foreclosed property. When a property has been foreclosed, the lender or financial institution selling the property may use a limited warranty deed because they typically cannot provide full title warranties due to their limited knowledge of the property’s title history.
- Real estate investors. Real estate investors who purchase properties to resell them quickly, known as “flippers,” may use limited warranty deeds to limit their liability for potential title issues that could have arisen before their ownership.
These examples are not exhaustive. Hawaii limited warranty deeds may be used any time the existing property owner wants to provide a limited warranty of title to the new property owner.
How to Create a Hawaii Limited Warranty Deed
The Hawaii limited warranty deed form is not based on Hawaii statutes. It is derived from the customary practice of Hawaii attorneys and title companies.6 Hawaii limited warranty deeds typically state that the current owner “grants, bargains, sells, and conveys” the property to the new owner. The terms of the deed’s limited warranty—including that the warranty only applies to the current owner’s ownership period—must be expressly written in a Hawaii limited warranty deed. The Hawaii limited warranty deed form typically includes the following information and must meet all Hawaii deed requirements:
- Names of the grantor (seller) and grantee (buyer)
- Description of the property being transferred, including the address and legal description
- A statement of consideration (Hawaii deeds customarily list nominal consideration)
- Specific language that identifies the deed as a limited warranty deed
- Any exceptions or reservations related to the property
- The grantor’s signature, which must be notarized
- The grantee’s address for tax purposes
Once completed and signed, the limited warranty deed must be recorded with the Bureau of Conveyances to provide public notice and protect the buyer’s interests.
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- Makainai v. Goo Wan Hoy, 14 Haw. 280 (1902).
- Lee v. Wong, 552 P.2d 635 (Haw. 1976).
- See Fujimori v. Dep’t of Human Servs., No. CAAP-17-0000466 (Haw. Ct. App. Aug. 31, 2022).
- Haw. Rev. Stat. § 28-527-5.
- See Haw. Rev. Stat. § 28-527-6.
- See S. Utsunomiya Ent. v. Moomuku Ctry. Club, 76 Haw. 396 (Haw. 1994).