Michigan Warranty Deed Form
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What is a Michigan Warranty Deed Form?
A Michigan warranty deed form is used to transfer Michigan real estate with a full warranty of title. A person who transfers property using a warranty deed guarantees that there are no problems with property’s title. A warranty deed’s guarantee covers all potential title problems in the property’s chain of title, including issues that arose before the current owner owned the property.
How Warranty of Title Works in Michigan
Warranty of title is a guarantee a property owner gives when transferring real estate to a new owner. A Michigan warranty deed provides a complete warranty of title that consists of five promises (or covenants of title) made to the new owner:
- Covenant of seisin. The current owner has legal ownership of the property.
- Covenant of right to convey. The current owner has the legal power to transfer the property to the new owner.
- Covenant of quiet possession. The new owner’s possession of the property will not be disturbed by third-party claims against the property.
- Covenant of freedom from encumbrances. There are no liens, mortgages, assessments, taxes, or other third-party interests attached to the property.
- Covenant of warranty. The current owner agrees to be legally responsible if a title issue arises and to defend the property’s title against third-party claims.1
How Warranty of Title Protects the New Owner
A warranty of title protects the new owner by placing the risk of title problems on the former owner who transferred the property. The former owner must compensate the new owner for any financial loss that a title problem causes. The new owner can sue the former owner for breach of warranty if the former owner fails to address a title problem discovered after the deed.
A Michigan warranty deed provides the new owner with the most protection of Michigan’s deeds—covering all potential title problems (unless expressly excluded from the warranty). Other Michigan deeds provide the new owner less protection or no protection against title problems.
Other Names for a Michigan Warranty Deed Form
Michigan and most other states use the name warranty deed for a deed that provides a complete warranty of title. Michigan law sometimes use the more descriptive name absolute warranty deed to specify the complete nature of the deed’s warranty.2
The name general warranty deed helps to distinguish warranty deeds from special warranty deeds—which provide a partial warranty. The term general warranty deed is uncommon in Michigan because Michigan calls deeds with a limited warranty covenant deeds.
A few states have different terms for what Michigan calls a warranty deed. For example, New York uses the name deed with full covenants.
How Do Michigan Warranty Deed Forms Relate to Other Forms of Deeds?
A Michigan warranty deed is distinguished from other types of deeds used in Michigan by the complete warranty of title the deed provides. Michigan’s two other main deed forms—covenant deeds and quitclaim deeds—provide a partial warranty or no warranty (respectively).
Michigan Quitclaim Deed
A Michigan quitclaim deed form transfers whatever ownership interest the transferor has with no warranty of title.3 The person who signs a quitclaim deed is not responsible for any title issues. The new owner cannot sue the transferor for breach of warranty—even if he or she did not actually own the property. Quitclaim deeds place all risk of title issues on the person receiving the property.
Michigan Covenant Deed
A Michigan covenant deed form provides the new owner a partial warranty of title that covers only the period when the transferor owned the property. The person signing a Michigan covenant deed agrees to be responsible for any title issues that he or she caused or allowed.4 The transferor is not responsible for any title issues that arose before he or she owned the property.
A covenant deed in Michigan is the equivalent of what most states call a special warranty deed or limited warranty deed. Special warranty deeds are not used in Michigan due to a unique Michigan law that prohibits the use of the words warranty deed in any deed that does not provide an absolute warranty.5
Michigan Warranty Deeds and Other Michigan Deed Forms
A Michigan warranty deed also differs from other deed forms—like traditional life estate deeds and lady bird deeds—that are used to avoid probate in Michigan. These estate-planning deeds are named after their probate avoidance feature, which is a separate issue from the warranty of title. Because these terms relate to different features, a deed can be both a life estate deed and a warranty deed.
A Michigan lady bird deed—also called an enhanced life estate deed—allows the property owner to retain greater control over the property for life. The owner reserves the right to sell, transfer, or mortgage the property without the remainder beneficiary’s consent until the owner’s death. Michigan is one of only a few states that recognize lady bird deeds. Transfer-on-death deeds (or TOD deeds) serve a similar function in many other states, but Michigan law does not recognize TOD deeds.
Common Uses of Michigan Warranty Deed Forms
Warranty deeds are most often used when a buyer is purchasing real estate from an unrelated party for fair market value. Because the buyer is paying full value for the real estate, the buyer—or the buyer’s attorney or title insurance company—may insist on a warranty deed. Because warranty deeds place risk on the person who signs the deed, they are rarely used outside of the sale context.
Title insurance has become an essential part of most real estate sales. A title insurance policy covers any financial damage the owner incurs due to unknown title problems. The title insurance company bears the risk of title problems, so the warranty of title a deed provides is a less important factor than it once was. A purchaser covered by title insurance can take ownership through a covenant deed or quitclaim deed and still enjoy financial protection from title problems.
How to Create a Michigan Warranty Deed Form
Michigan’s real estate laws provide suggested statutory language for warranty deeds: “A.B. conveys and warrants to C.D. (here describe the premises) for the sum of (here insert the consideration).” A deed that uses that phrase includes the five covenants of title listed above.6
As with most other statutory deed forms, Michigan’s warranty deed language serves only as a starting point and is insufficient by itself to create a valid, recordable Michigan warranty deed. Michigan law includes other deed recording requirements that all deeds must meet. A deed must use the correct formatting, and it must include essential information—such as:
- The parties’ names;
- An accurate legal description of the property;
- A statement of consideration; and
- The co-ownership form the new owners will use to hold title (if there are multiple new owners).
Michigan deeds must also be signed by the owner making the transfer and notarized. The original, notarized should then be recorded with the register of deeds for the county where the property is located to protect the new owner’s interest.7
Real estate laws and deed requirements can vary considerably between states. It is therefore important to use a deed designed for use in Michigan when transferring Michigan real estate. An imprecisely worded deed or a deed created for another state may be unrecordable in Michigan or result in an invalid transfer.
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