New Jersey Warranty Deed Form
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What is a New Jersey Warranty Deed Form?
A New Jersey warranty deed form, also known as a general warranty deed, is a legal document used to transfer real estate ownership from the grantor (seller) to the grantee (buyer) with full warranties. A warranty deed provides the highest level of protection to the grantee, as the grantor guarantees a clear and marketable title, free from any liens, encumbrances, or title defects that arose at any time during the property’s history.1 New Jersey’s real estate laws provide statutory form language for creating warranty deeds.2
How Warranty of Title Works in New Jersey
A New Jersey general warranty deed provides a complete warranty of title that guarantees the new owner a good title, free of any issues that would impair the new owner’s interest. A deed’s warranty consists of multiple covenants of title—legal promises about the property’s title—made by the grantor. A New Jersey warranty deed typically includes the following covenants:
- Covenant of seisin. The grantor holds complete, undisputed title to the property.3
- Covenant of the right to convey. The grantor has the legal right to transfer the property (and any rights attached to the property) to the new owner under the terms stated in the deed.4
- Covenant against encumbrances. The grantor guarantees that the property is free from “all former mortgages, judgments, executions, and of and from all other encumbrances whatever.”5
- Covenant of quiet possession. The grantor promises that new owner will have the right to possess and use the property with no interruption by legal claims of third parties.6
- Covenant of general warranty. The grantor agrees accept responsibility for any title issues and to defend the new owner’s title against any claims that challenge the title.7
- Covenant of further assurances. The grantor pledges to take future actions or sign documents needed to verify or confirm the new owners ownership of the property.8
These covenants of title included in a New Jersey warranty deed provide comprehensive protection to the grantee, placing the risk of potential title issues on the grantor.
How Warranty of Title Protects the New Owner
A complete warranty of title (or general warranty) provided by a New Jersey warranty deed guarantees the grantee will receive clear and marketable title to the property being transferred. A warranty deed offers the highest level of protection to the grantee, as it covers all title defects and encumbrances, even those that may have arisen before the grantor’s ownership.
A grantor who provides a complete warranty also promises to defend the grantee’s title against any third-party claims. If a title problem is discovered, the grantor has a legal duty to protect the grantee’s interest by resolving the issue or compensating the grantee for any financial loss that it causes.9 The grantee can sue the grantor for breach of warranty if there are problems with the title or the grantor fails to honor the warranty.
New Jersey Warranty Deeds and Title Insurance
Title insurance is a form of insurance policy that protects the policyholder—usually the buyer or lender in a real estate transaction—against financial loss due to defects in the title or undisclosed liens and encumbrances on the property.10 If a title defect arises after the property transfer, the title insurance company will defend the policyholder’s rights and cover the costs associated with resolving the issue, up to the policy limit.
Title insurance is often used in conjunction with a warranty deed to provide additional protection for the grantee. Although a warranty deed already provides comprehensive warranties that cover all title issues not specifically excluded from the warranty, title insurance adds greater security by ensuring a reliable payment source (the title insurance company) to compensate the grantee for losses caused by title problems. This arrangement protects the grantee in case the grantor is unable or unwilling to defend the property’s title or pay any amounts due under the warranty deed.
Title insurance policies typically come in two types: owner’s title insurance and lender’s title insurance. Owner’s title insurance protects the grantee’s financial interest in the property, while lender’s title insurance protects the mortgage lender’s interest. It is common for a grantee to purchase an owner’s title insurance policy when obtaining real estate through a warranty deed.
Other Names for a New Jersey Warranty Deed Form
The type of deed known in New Jersey as a warranty deed form or general warranty deed is used across the United States to transfer real estate with full warranties. The names warranty deed and general warranty deed are commonly used in most states, though some states use slightly different terminology for a deed that transfers real estate with a complete warranty of title. New York, for example, uses the name deed with full covenants.
How Do New Jersey Warranty Deed Forms Relate to Other Forms of Deeds?
In New Jersey, warranty deed forms provide the most comprehensive protection and guarantees to the grantee compared to other types of deeds. Two other common deed types used in New Jersey— quitclaim deeds and special warranty deeds—transfer property with no protection or with less protection.
- New Jersey quitclaim deed form. A New Jersey quitclaim deed form transfers whatever interest the grantor may have in the property (if any) without any warranties or guarantees about the title.11 The grantee assumes the risk of any title defects or encumbrances, and the grantor has no obligation to defend the grantee’s title in case of a future claim. Quitclaim deeds are commonly used in situations where the parties have an existing relationship, or when the grantee provides no consideration in exchange for the property. An owner might use a quitclaim deed to transfer property to a family member or to correct a title issue.
- New Jersey special warranty deed form. A New Jersey special warranty deed form transfers property “with special warranty”—providing the new owner a limited warranty of title.12The grantor warrants the grantee’s title against third-party claims that arose while the grantor owned the property.13 A special warranty deed does not cover title problems that may have arisen before the grantor’s ownership. Special warranty deeds offer some protection to the grantee but not as much as warranty deeds.
A New Jersey bargain and sale deed may omit covenants altogether—in which case it is usually called a bargain and sale deed without covenants and works similarly to a quitclaim deed.15
New Jersey warranty deed forms provide the grantee with the highest level of protection compared to special warranty deeds and quitclaim deeds. They ensure that the grantor has clear title to the property, free from any liens, encumbrances, or title defects, and include the grantor’s promise to defend the grantee’s title against any third-party claims.
New Jersey Warranty Deeds and Other New Jersey Deed Forms
Warranty deed forms in New Jersey are characterized by their transfer of real estate ownership with full warranties. Other New Jersey deeds are named for their role in estate planning.
A New Jersey life estate deed is a deed that allows an owner to transfer future ownership to a beneficiary, while retaining a lifetime ownership interest and the right to use and occupy the property for the rest of his or her life. Upon the current owner’s death, the property automatically passes to the beneficiary without going through probate. A life estate deed may be prepared with or without warranties, depending on the specific circumstances and the grantor’s preferences.
Transfer-on-Death deeds in New Jersey
New Jersey does not currently recognize transfer-on-death deeds, a type of deed that allows the owner to designate a beneficiary who will receive the property upon the owner’s death without going through probate. New Jersey real estate owners may use living trusts, life estate deeds, or other estate planning tools to achieve similar objectives.
Common Uses of New Jersey Warranty Deed Forms
A warranty deed form in New Jersey is commonly used in various real estate transactions to provide the highest level of protection to the grantee. Warranty deeds are common in sales of residential properties, as a homebuyer needs assurance of a clear and marketable title. Warranty deeds are also used in some commercial property sales when the purchaser requests a comprehensive guarantee of the a clear title.
How to Create a New Jersey Warranty Deed Form
As with any deed, a New Jersey 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.
The warranty deed should meet all New Jersey deed requirements and include essential information such as the names of the grantor and grantee, the property’s legal description, the consideration (usually the purchase price), and the warranties being provided by the grantor.
The grantor must sign the warranty deed in the presence of a notary public, who will then notarize the document to confirm the grantor’s identity and the authenticity of the signature. Once the warranty deed has been signed, it should be recorded with the county recording officer (usually called the county clerk or county register) for the county where the property is located. Recording the deed provides public notice of the property transfer and protects the grantee’s ownership rights against subsequent claims or transfer.
New Jersey imposes transfer taxes on the sale of real property. Transfer taxes must be paid at the time of recording, along with the recording fees required to file the warranty deed for recording.
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- N.J.S.A. § 46:4-7.
- N.J.S.A. § 46: 4-9.
- N.J.S.A. § 46:4-3.
- N.J.S.A. § 46:4-4.
- N.J.S.A. § 46:4-5.
- N.J.S.A. § 46:4-5.
- N.J.S.A. § 46:4-7.
- N.J.S.A. § 46:4-10.
- N.J.S.A. § 46: 4-7.
- N.J.S.A. § 17:46B-1(a).
- N.J.S.A. § 46:5-2.
- N.J.S.A. § 46:4-9.
- N.J.S.A. § 46:4-8.
- N.J.S.A. § 46:4-6.
- Somerset County v. Durling, 415 A.2d 371 (N.J. 1980).