New Mexico Warranty Deed Form
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What is a New Mexico Warranty Deed Form?
A New Mexico warranty deed transfers ownership of New Mexico real estate to a new owner. A warranty deed provides the buyer with a full warranty of title, which means that the seller guarantees that they have clear and marketable title to the property and that there are no encumbrances, liens, or other issues with the title.1 In essence, the seller promises that the buyer will receive undisputed ownership of the property and that there are no outstanding claims against it.
New Mexico has a statutory form warranty deed with language that transfers property with complete warranty of title.2
How Warranty of Title Works in New Mexico
In New Mexico, a warranty of title is a guarantee that the seller of a property has legal ownership of the property and that the title is free and clear of any defects or claims.3 A warranty of title is an important protection for the buyer because it ensures that the seller will be legally responsible for any outstanding liens or encumbrances on the property as of the date of the deed. If any such claims arise after the transfer, the seller must resolve them or compensate the buyer for the financial loss that results.4
A warranty deed provides the most comprehensive warranty of title available in New Mexico. A warranty deed’s warranty covers not only defects that occurred during the seller’s ownership of the property but also any defects that arose before the seller owned the property. This means that the buyer is protected from any defects in the title that arose before the seller owned the property, even if the seller was unaware of them at the time of the sale.
New Mexico Warranty Deeds and Title Insurance
Title insurance is a type of insurance policy that protects the buyer from any defects in the title that discovered after the policy is issued.5 While a warranty deed provides a warranty of title from the seller, title insurance provides the buyer an additional layer of protection by shifting the risk of financial loss from title problems to the insurance company.
If any defects in the title are discovered after the sale, the title insurance company will either correct the defect or compensate the buyer for any losses that they may incur as a result of the defect. This can include any legal fees associated with resolving the defect or any loss of value to the property. When a New Mexico warranty deed is used in a real estate transaction, the title insurance policy typically covers any title problems that existed before or while the seller owned the property. This supplements the deed’s warranty and ensures a reliable source of compensation if a title problem is discovered.
In New Mexico, it is common for both the buyer and the lender to purchase title insurance. The buyer’s title insurance policy is typically purchased at the time of closing and provides protection for as long as the buyer owns the property. The lender’s title insurance policy is typically purchased by the lender and provides protection for the amount of the loan.
Other Names for a New Mexico Warranty Deed Form
The name warranty deed is commonly used in many states for a deed that transfers real estate with a complete warranty of title. In New Mexico and in many other states, a warranty deed may be called a general warranty deed to distinguish it from a special warranty deed, which provides a less thorough warranty of title.
The name statutory warranty deed refers to a deed that provides a warranty based on statutory language used in the deed. New Mexico warranty deeds are sometimes called statutory warranty deeds. However, the name is imprecise because a New Mexico special warranty deed is technically a statutory warranty deed, also.
Other states may refer to a warranty deed by different names, but the basic concept of a deed that provides a complete warranty of title is consistent across all states.
How Do New Mexico Warranty Deed Forms Relate to Other Forms of Deeds?
In New Mexico, there are several other types of deeds that are commonly used to transfer real estate. Along with warranty deeds, special warranty deeds and quitclaim deeds are the most common New Mexico deeds. All three types of deeds serve the basic purpose of transferring ownership of real estate, but there are differences in the warranties they provide (or do not provide).
- New Mexico special warranty deed form. A New Mexico special warranty deed form, provides a limited warranty of title.6 A seller who signs a special warranty deed warrants that he or she has not caused any defects in the property’s title.7 This means that the buyer is protected from title problems that arose while the seller owned the property but is not protected from any issues that may have existed before the seller owned the property.
- New Mexico quitclaim deed form. A New Mexico quitclaim deed form provides no warranty of title at all. With a quitclaim deed, the seller is simply transferring whatever interest they have in the property to the buyer without making any guarantees about the title.8 This means that the new owner takes on all of the risks associated with the title, including any defects or claims that may arise in the future.
A New Mexico warranty deed provides the most comprehensive protection for a buyer, as it covers all defects in the title, regardless of when they occurred. Special warranty deeds and quitclaim deeds may be more appropriate in certain situations—such as when there is no consideration for the transfer of when the deed’s purpose is to re-title the property without changing actual possession.
New Mexico Warranty Deeds and Other New Mexico Deed Forms
Warranty deeds, special warranty deeds, and quitclaim deeds are named for the warranties they provide (or omit). New Mexico recognizes several other types of deeds with names derived from their estate planning purposes. Life estate deeds and transfer-on-death deeds are two of the most popular New Mexico estate-planning purposes.
- New Mexico life estate deed. A New Mexico life estate deed allows the owner of the property to give another person the right to own the property after the current owner dies. The current owner typically keeps lifetime ownership of the property (called a life estate)—which includes the right to use and occupy the property for the rest of the owner’s life. Life estate deeds are often useful for estate planning, as they allow real estate to pass to the designated beneficiary without the need for probate. A downside is that an owners who records a life estate deed can only sell or transfer complete ownership of the property with the beneficiary’s consent.
- New Mexico transfer-on-death deed. A New Mexico transfer-on-death deed (or TOD deed) allows the property owner to transfer ownership to another person effective upon the owner’s death.9 Like life estate deeds, TOD deeds are useful for estate planning because they avoid probate. New Mexico TOD deeds have the advantage of being revocable, and the owner has the right to sell or transfer the property without the beneficiary’s consent.
Common Uses of New Mexico Warranty Deed Forms
A New Mexico warranty deed is commonly used in real estate sales—particularly sales of residential properties. Warranty deeds are ideal for homebuyers, as they provide the strongest assurance of a good title and the greatest protection if a title problem emerges. Warranty deeds are also used in New Mexico for sales of commercial or industrial properties—though special warranty deeds are common in those types of sales.
Mortgage lenders may sometimes require a warranty deed when financing a real estate purchase. Mortgage loans are secured by the purchased property, so it is important for the lender that the buyer actually receive good title.
Warranty deeds may be used for transfers that do not involve a sale for fair market value. But quitclaim deeds and special warranty deeds are more common when the new owner provides no consideration for the transfer.
How to Create a New Mexico Warranty Deed Form
As with any deed, a New Mexico 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 valid New Mexico warranty deed must meet New Mexico’s legal requirements for deeds. The general requirements include proper formatting and the essential information about the transfer—such as the names of the grantor (seller) and grantee (buyer), a legal description of the property being transferred, and a granting clause stating that the current owner is transferring title to the new owner.10
A New Mexico warranty deed must contain language that identifies the document as a warranty deed that transfers property with a complete warranty. New Mexico law assumes that a deed is a warranty deed if it uses the model warranty deed form and says that the grantor “grants” the property “with warranty covenants.”11
The grantor must sign the deed, and it must be notarized. The notary public must witness the grantor’s signature and affix the notary’s own signature and official seal to the deed. The signature and notarization are necessary to validate the deed and ensure it is legally binding and recordable. The signed, notarized deed is then recorded with the county clerk of the county where the real estate is located.
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