A special warranty deed (also called a grant deed, covenant deed, or limited warranty deed) is a deed form that transfers property with a warranty of title limited to the period when the signing owner owned the property.
A special warranty requires special language to ensure that the deed qualifies. This language is automatically included by our Deed Generator.
A special warranty deed transfers title from one owner (called a grantor) to another owner (called a grantee). The title is transferred with a limited warranty of title. By signing the deed, the grantor promises that—for as long as the grantor has owned the property—nothing has happened that would cause title issues for the grantee. The grantor makes no promises about what may have happened before the grantor owned the property.
Special warranty deeds place some risk on the grantor and some risk on the grantee. The grantor is legally responsible for any title issues that arose while the grantor owned the property. The grantee assumes the risk of any title issues that arose before the grantor owned the property.
Of all of the types of deeds, special warranty deeds have the largest variety of names. Depending on the state, special warranty deeds may be called grant deeds, covenant deeds, statutory warranty deeds, or limited warranty deeds. Each name refers to essentially the same document: A deed that makes the grantor responsible for title issues but limits the grantor’s liability to the period when the grantor owned the property.
The designation of a deed as a special warranty deed identifies the warranty of title. The warranty provided by a special warranty deed is limited in the sense that it only covers the period when the grantor owned the property.
By dividing risk between the grantor and grantee, the limited warranty of title provided by a special warranty deed provides a middle ground between quitclaim deeds and warranty deeds.
In the sale context, the protection provided by the special warranty title has been supplemented—and sometimes replaced—by title insurance. Title insurance allows the grantor to avoid the risk of unknown title issues and provides the grantee with the protection of a solvent financial institution to look to if title issues arise.
Special warranty deeds also differ from estate planning deeds, including life estate deeds, lady bird deeds, and transfer-on-death deeds. Each of these deeds is named after the estate planning and probate avoidance benefits it provides. Special warranty deeds, in contrast, are named after the warranty of title they provide.
Special warranty deeds are often used in negotiated situations, where the grantor is uncomfortable with the liability associated with a warranty deed and the grantee wants more protection than a quitclaim deed. Common uses include:
The middle ground of protection provided by a warranty deed makes it appealing in these situations.
The legal basis for the validity of a special warranty deed depends on state law. In some states, like Alabama, a specific statute authorizes the creation of a special warranty deed. In others, like Michigan, special warranty deeds (called covenant deeds in Michigan) are accepted under common law. Even in states that provide statutory language, the deed must take into account the other elements of a deed. These features include:
When creating special warranty deeds, it is important to understand the legal basis and create a deed that meets the requirements of that state. Using a generic form is dangerous. A special warranty deed that is valid in one state may be a crime in another state. For example, Michigan law makes it a crime to use the word “warranty” in any deed that does not convey a full warranty of title. An uninformed property owner using a generic, fill-in-the-blank form for a special warranty deed could become criminally liable for including the wrong language. Each deed created by our Deed Generator was designed by attorneys to comply with the requirements of the state where the property is located.