Minnesota Limited Warranty Deed Form
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What Is a Minnesota Limited Warranty Deed Form?
A Minnesota limited warranty deed, known in some states as a special warranty deed, is a legal document used to transfer real estate ownership in the state of Minnesota. A limited warranty deed offers a moderate level of protection to the person receiving the property (the grantee) compared to other types of deeds. The person transferring the property (the grantor) in a limited warranty deed provides warranties or guarantees only for the period during which he or she owned the property, not for the property’s entire history.
In a Minnesota limited warranty deed, the grantor assures the grantee that no defects in the title occurred during the grantor’s ownership and that he or she will defend the grantee against any claims arising from such defects. This means that the grantor is not responsible for any title defects that may have occurred before he or she owned the property.
What Is Warranty of Title?
A warranty of title is a legal guarantee provided by the grantor in a deed, assuring the grantee that the title to the property being transferred is clear and free from any defects or encumbrances.1 A warranty of title protects the grantee from potential title issues and gives the grantee legal recourse against the grantor if a title problem is discovered after the transfer.
There are different levels of warranties of title, depending on the type of deed being used. A general warranty deed provides a complete guarantee that covers the entire history of the property—not just the grantor’s ownership period. On the other hand, a limited warranty deed offers a more moderate level of protection as the grantor only warrants the title during their period of ownership. A quitclaim deed offers the least protection as it does not provide any warranties of title.
Other Names for a Minnesota Limited Warranty Deed Form
The type of deed that Minnesota calls a limited warranty deed has a variety of other names in other states. Although the names may vary, the following deeds are all based around the same core concept. The grantor warrants that, while owning the property, he or she did nothing to impair the property’s title.
- Special warranty deed (used in many states, including Texas and Florida);
- Grant deed (used in California);
- Covenant deed (used in Michigan).
Each of these deeds transfer real estate with a limited warranty, though the specific requirements and the precise terms of the warranty may vary between states.
How Do Minnesota Limited Warranty Deed Forms Relate to Other Forms of Deeds?
In Minnesota, there are three primary types of deeds: general warranty deeds, limited warranty deeds (also called special warranty deeds), and quitclaim deeds. Minnesota limited warranty deeds split the difference between a general warranty deed’s complete warranty and a quitclaim deed’s lack of warranty.
- Minnesota general warranty deed form. In a Minnesota general warranty deed form, the grantor provides the most comprehensive protection to the grantee by warranting the title for the entire history of the property.2 The grantor guarantees that there are no defects or encumbrances on the title, whether they occurred during the grantor’s ownership or before that. This type of deed—which is sometimes called simply warranty deed—offers the highest level of protection for the grantee.
- Minnesota quitclaim deed form. A Minnesota quitclaim deed form provides the least protection to the grantee, as it does not offer any warranties of title. For a quitclaim deed, the grantor merely transfers their interest in the property, if any, with no guarantees concerning the title’s state.3
It is important to consider the level of protection required and the potential risks involved when selecting the appropriate type of deed.
Minnesota Title Insurance and Limited Warranty Deeds
Title insurance is an insurance policy that protects property owners and lenders from financial losses due to property title defects. It covers issues such as liens, encumbrances, easements, or other title defects that might not have been discovered during the title search process. Title insurance policies come in two basic forms: Owner’s policies for property owners and lender’s policies for mortgage lenders.
Title insurance can provide an added layer of protection for a grantee who acquires real estate through a Minnesota limited warranty deed. While the limited warranty only covers the title during the grantor’s period of ownership, title insurance can help protect against potential issues that may have occurred before the grantor acquired the property. Title insurance can offer broader protection against title defects that a deed’s limited warranty does not cover and also ensures a reliable source of compensation if a title issue is discovered.
Minnesota Limited Warranty Deed Forms and Minnesota Estate Planning Deeds
Minnesota limited warranty deeds are named for the limited warranty of title they provide. Minnesota also recognizes types of deeds named for the specific purposes they serve for estate planning. Some common Minnesota estate planning deeds include:
- Minnesota life estate deed form. A Minnesota life estate deed form allows a property owner to keep ownership for life and transfer to a beneficiary (the remainderman) the right to future ownership upon the owner’s death.4 A life estate deed helps avoid probate and ensures a smooth transition outside probate upon the owner’s death. The downside is that a life estate deed limits the owner’s right to sell or mortgage the property.
- Minnesota transfer-on-death deed (TODD). A Minnesota transfer-on-death deed form allows the grantor to designate a beneficiary who will receive the property upon the grantor’s death without going through probate. The grantor retains full ownership and control of the property (including the right to sell it) during his or her lifetime and can revoke or change the beneficiary designation at any time until death.5
Common Uses of Minnesota Limited Warranty Deed Forms
A Minnesota limited warranty deed is commonly used in various property transactions where the grantor wants to provide a moderate level of protection to the grantee. Some common situations where a limited warranty deed may be used include:
- Sale of property. When selling a property, a limited warranty deed can be used to transfer ownership while providing assurances to the buyer that no defects in the title occurred during the grantor’s ownership.
- Foreclosure sales. Properties acquired through foreclosure sales often use limited warranty deeds, as the seller may not have full knowledge of the property’s history and can only warrant the title for the period they held ownership.
- Transactions involving commercial properties. In some cases, commercial property transactions may utilize a limited warranty deed to provide a reasonable level of protection without the broader guarantees of a general warranty deed.
- Transactions between businesses or investors. When properties are transferred between businesses or investors, a limited warranty deed may be used to provide protection while limiting the grantor’s liability for defects in the title that occurred before their ownership.
Whether a limited warranty deed is appropriate in a certain situation depends on the details of the transaction and the parties involved.
How to Create a Minnesota Limited Warranty Deed
As with any deed, a Minnesota limited warranty deed should be customized to reflect the specific terms and conditions of the transaction. Reliance on fill-in-the-blank forms can lead to invalid documents and future title issues.
A Minnesota limited warranty deed must satisfy Minnesota’s general requirements for recordable deeds, and it must contain the details of the transfer. Vital information includes the names of the grantor and grantee, a document title, a tax address, and a legal description of the property.
The limited warranty deed must also have the right language to limit the grantor’s warranty. Minnesota has no statutory limited warranty language, though Minnesota limited warranty deeds customarily include the grantor’s covenant that he or she “has not done or suffered anything to be done” to impair the property’s title.
The grantor must sign the limited warranty deed in the presence of a notary public. The notary verifies the grantor’s identity and verifies that the grantor signed the document voluntarily. After the deed has been signed and notarized, it should be recorded with the county recorder’s office in the county where the property is located. Recording the deed provides public notice of the transfer and helps establish the priority of claims against the property.
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