North Dakota Special Warranty Deed Form
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What Is a North Dakota Special Warranty Deed Form?
A North Dakota special warranty deed transfers ownership of North Dakota real estate with a limited warranty of title.1 A North Dakota special warranty deed only guarantees the property’s title for the period of time when the seller owned the property.2 This means that the seller warrants that there are no problems with the property’s title that occurred while the seller owned the property. Any title defects that existed prior to the seller’s ownership of the property are not covered.
What Is Warranty of Title?
A warranty of title in North Dakota is a guarantee that a deed will transfer valid, clear ownership of the property. A seller who provides a complete warranty promises the new owner a good title that is free from any liens, taxes, assessments, or other encumbrances.3 A seller who provides a complete warranty of title agrees to be responsible if any title problems are discovered and to defend the new owner’s title against third-party claims.
A North Dakota special warranty deed provides a limited warranty of title that does not cover every possible title issue throughout the property’s entire history. Instead, the seller guarantees:
- That he or she has not transferred the property to anyone else; and
- That he or she has not done or allowed anything to cause a problem with the property’s title.4
A special warranty deed’s warranty covers only the time period of the seller’s ownership. It does not extend to any title issues that existed before the seller acquired the property.
Other Names for a North Dakota Special Warranty Deed Form
North Dakota uses the name special warranty deed for a deed that transfers real estate with a partial warranty of title. Special warranty deed is the most common name nationally for this kind of deed, though other states use different names—including:
- Limited warranty deed (In states like Ohio and Kansas)
- Statutory warranty deed (in Alabama)
- Grant deed (in California)
- Covenant deed (in Michigan)
- Bargain and sale deed (in Nevada, New York, and Washington)
The name grant deed is sometimes used in North Dakota because under North Dakota law a special warranty deed’s covenants are implied based on the use of the word grant within the deed.5
How Do North Dakota Special Warranty Deed Forms Relate to Other Forms of Deeds?
In North Dakota, several other types of deeds are commonly used in real estate transactions—each of which provides a different level of protection to the buyer. A special warranty deed shares the risk of title problems between the buyer and the seller. The other two common deed forms—warranty deeds and quitclaim deeds—place all risk on one party or the other.
- North Dakota warranty deed form. A North Dakota warranty deed form provides the most extensive warranty of title. The seller guarantees that the title is free from all defects, even those that existed prior to the seller’s ownership of the property. The seller also promises to defend the title against any claims made by third parties.6
- North Dakota quitclaim deed form. A North Dakota quitclaim deed form, on the other hand, provides no warranty of title. The grantor simply transfers any interest he or she may have in the property to the new owner. The new owner receives no guarantees about the quality or validity of the property’s title.7
In the real estate sale context, it’s important for buyers and sellers to carefully consider the type of deed used to transfer the property. Both parties should understand the level of protection the deed provides and how the deed allocates the risk of title problems.
North Dakota Title Insurance and Special Warranty Deeds
Title insurance is a type of insurance that protects the buyer and the lender from any loss resulting from defects in the title or liens against the property. Title insurance policies are issued by title insurance companies and are purchased by the buyer or the lender at the time of the real estate transaction.
In North Dakota, title insurance is often used in conjunction with a special warranty deed to provide additional protection to the buyer. If a defect in the title is discovered after the transaction has been completed, the title insurance company will defend the buyer’s interest in the property and will cover any losses resulting from the defect (up to the policy limits). Title insurance is a reliable source of compensation and covers all possible defects in existence when the policy is issued, except for those specifically excluded from the coverage.
North Dakota Special Warranty Deed Forms and North Dakota Estate Planning Deeds
In North Dakota, there are a few deeds that are commonly used in estate planning—particularly to avoid probate. North Dakota estate-planning deeds include life estate deeds and transfer-on-death deeds.
- North Dakota life estate deed. A life estate deed splits property ownership into a lifetime interest (the life estate) and a remainder interest after the life estate ends. A property owner who creates a life estate deed often keeps the life estate, so that he or she holds title and the right to occupy and use the property for life. The owner typically names a family member as the remainder beneficiary who will receive the property when the owner dies—with no need for probate.
- North Dakota transfer-on-death deed. A North Dakota transfer-on-death deed form allows an owner to name a beneficiary who will receive ownership of the property when the owner dies. The beneficiary takes title automatically upon the owner’s death, without the need for probate. Unlike a life estate deed, a TOD deed preserves the owner’s right to sell or transfer the property—or to amend or revoke the TOD deed—for the rest of the owner’s life.
Common Uses of North Dakota Special Warranty Deed Forms
A North Dakota special warranty deed is commonly used in real estate transactions where the seller does not want to provide the broad protections of a warranty deed. This may be because the seller is unsure about the quality or validity of the title, or because they do not want to assume the risk of title defects from before they took title.
Special warranty deeds are commonly used for commercial real estate sales, where the risks associated with title defects may be higher.
How to Create a North Dakota Special Warranty Deed
As with any deed, a North Dakota special warranty deed should meet all North Dakota deed requirements and 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 North Dakota special warranty deed must be in writing. It must contain the information that North Dakota law requires—including a legal description of the property being transferred, the buyer and seller’s names and addresses, and a granting clause indicating the transfer from the current owner to the new owner.
A special warranty deed must also have the language needed to incorporate the limited warranty of title. A deed that uses the word “grant” automatically includes a limited warranty under North Dakota law, but the parties may modify that warranty or include an express warranty that outlines the guarantee the transferor is providing.8
The completed deed must be signed and notarized. Then, it must be filed with the county recorder’s office in the county where the property is located. The effect of recording a North Dakota deed is to provide constructive notice of the deed’s contents to all persons.9
Need a special warranty deed that meets North Dakota recording requirements?
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