Tennessee Special Warranty Deed Form
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What Is a Tennessee Special Warranty Deed Form?
A Tennessee special warranty deed is a legal document that transfers real estate ownership from the grantor (seller) to the grantee (buyer) with a limited warranty (also called a special warranty). The grantor guarantees that no title problems have arisen while the grantor owned the property. In other words, the grantor promises that he or she has not done or allowed anything to cause a lien or other encumbrance on the property.1 A special warranty deed’s warranty does not cover anything that occurred before the grantor acquired the property.
A Tennessee special warranty deed gives the new owner less protection than a general warranty deed but more protection than a quitclaim deed.
What Is Warranty of Title in a Tennessee Special Warranty Deed?
A warranty of title refers to the grantor’s assurances regarding the property’s title. In a special warranty deed, the grantor provides a limited warranty that ordinarily consists of three promises—called covenants of title:2
- Covenant of seisin. The grantor has legal ownership and possession of the property.
- Covenant of right to convey. The grantor has the legal right to transfer the property to the new owner.
- Covenant of special warranty. The grantor promises to defend the property’s title against any third-party claims that arose during the grantor’s ownership period.
A Tennessee special warranty deed’s warranty protects the new owner against some (but not all) potential problems with the property’s title. The grantor is legally responsible for resolving any title issues that arose while the grantor owned the property. If a title issue is discovered that is within the limited warranty’s scope, the grantor must fix the problem or compensate the new owner for any financial loss that the problem causes.3
Other Names for a Tennessee Special Warranty Deed Form
Tennessee uses the term special warranty deed—which is the most common name nationally—for a deed that transfers property with a limited warranty. Some other states use different names for deeds with similar warranties. Alternative names for special warranty deeds include:
- Limited warranty deed (e.g., Kansas and Ohio);
- Grant deed (e.g., California);
- Covenant deed (e.g., Michigan); and
- Bargain and sale deed with covenant (e.g., New York).
There are sometimes subtle differences between states, but each of the above deeds generally serves the same function—ensuring that the new owner receives some protection but not the complete guarantee that a warranty deed offers.
How Do Tennessee Special Warranty Deed Forms Relate to Other Forms of Deeds?
In Tennessee, various types of deeds offer different levels of protection to the grantee. A special warranty deed provides a limited warranty that serves as a middle ground between Tennessee’s two other main types of deeds for real estate transfers: warranty deeds and quitclaim deeds.
- Tennessee warranty deed form. A Tennessee warranty deed form—also called a general warranty deed form—offers the new owner the most complete warranty. The warranty deed guarantees a good title that is free and clear of all defects and encumbrances, regardless of when the issue arose.4 Warranty deeds are commonly used in residential property transactions—where the buyer typically needs the highest level of protection.
- Tennessee quitclaim deed form. A Tennessee quitclaim deed form transfers the grantor’s interest (if any) with no warranties of title.5 The new owner receives whatever interest the grantor holds with no assurance about the title’s status. Quitclaim deeds are typically used to clear up title issues or transfer property among family members.
Tennessee Title Insurance and Special Warranty Deeds
Title insurance is a policy that protects the grantee and/or a lender from financial losses due to problems with the property’s title that are not discovered during a title search conducted before the policy is issued.6 If a title issue is identified or a third party asserts a claim on the property’s title, the insurance company must compensate the insured person for any financial loss the problem causes or defend the property’s title against the claim.7
Title insurance can supplement the protection provided by a Tennessee special warranty deed. The policy covers potential issues that may not be within the scope of the deed’s limited warranty. Title insurance also ensures a reliable source of compensation (the insurance company) even if the grantor is unable to meet the warranty’s obligations.
Tennessee Special Warranty Deed Forms and Other Tennessee Deeds Used in Estate Planning
Tennessee recognizes two main types of deeds for use in estate planning—life estate deeds and survivorship deeds. Estate-planning deeds are designed to arrange during an owner’s life for future transfer of property outside probate.
- Life estate deeds. Tennessee life estate deeds give the owner a lifetime ownership interest in real estate (the life estate) and give another person (the remainder beneficiary) the right to receive ownership when the current owner dies.8 The owner continues to own, possess, and use the property for the rest of his or her life. When the owner dies, the remainder beneficiary automatically takes title, with no need for probate.
- Survivorship deed. Tennessee survivorship deeds are deeds that transfer title to multiple co-owners with a right of survivorship. The right of survivorship gives a surviving co-owner the right to automatically receive a deceased co-owner’s share—which means the deceased owner’s share avoids probate. The joint owners named in a Tennessee survivorship deed must be joint tenants with right of survivorship or (if married) tenants by the entirety, as those are the co-ownership forms in Tennessee that have a right of survivorship.9
Tennessee special warranty deeds are named for the limited warranty they provide to the new owner. Tennessee’s estate-planning deeds—on the other hand—are named for how they work to avoid probate. These two features can co-exist in the same deed, so a special warranty deed may also be an estate-planning deed. For example, one deed may be both a special warranty deed and a life estate deed.
Common Uses of Tennessee Special Warranty Deed Forms
Special warranty deeds are used in various real estate transactions in Tennessee when the grantor is willing to provide some protection to the grantee but not as comprehensive or a warranty as a general warranty deed. Common uses for special warranty deeds include.
- Commercial property transactions. Due to the limited warranties provided, special warranty deeds are often used in commercial transactions. The parties to commercial sales are often more experienced and better able to manage potential title issues and negotiate the terms of a limited warranty.
- Transactions involving institutional sellers. Special warranty deeds are frequently used when property is sold by banks, government entities, or other large institutions. Institutional sellers often prefer to limit their liability and lack sufficient knowledge of the property’s history to provide a complete warranty.
- Transactions where the grantor has limited knowledge of the property’s history. In cases where the grantor has not owned the property for an extended period or is otherwise unfamiliar with its history, a special warranty deed can limit the grantor’s liability for unknown title defects while protecting the grantee from any actions or omissions by the grantor.
How to Create a Tennessee Special Warranty Deed
As with any deed, a Tennessee special 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 Tennessee special warranty deed must meet all Tennessee deed requirements. The deed should include the names of the grantor and grantee, the legal description of the property, a derivation clause that identifies the source of the grantor’s title, and a granting clause indicating that the property is being conveyed to the new owner. The new owner must confirm the property value or actual consideration for the transfer in an affidavit or statement within the deed document, but Tennessee deeds often state nominal consideration within the body of the deed itself.10
A special warranty deed must also have the language needed to provide the limited warranty to the new owner. Most Tennessee special warranty deeds do this by including the following affirmation from the grantor: “I covenant that I am seized and possessed of this land, and have a right to convey it, and I warrant the title against all persons claiming under me.”11
The grantor must sign the deed in the presence of a notary public, who will notarize the grantor’s signature to confirm the grantor’s identity and voluntary execution of the deed. The signed, notarized deed should be recorded in the Register of Deeds office in the county where the property is located. The register of deeds will charge a recording fee and collect the transfer tax due (if any) at the time of recording.12
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- Tenn. Code Ann. § 66-5-103(1)(B).
- Tenn. Code Ann. § 66-5-103(1)(B).
- Dickinson v. Bain, 921 S.W.2d 189 (Tenn. 1996).
- Tenn. Code Ann. § 66-5-103(1)(A).
- Tenn. Code Ann. § 66-5-103(2).
- Tenn. Code Ann. § 56-35-129.
- Tenn. Code Ann. § 56-35-102(11).
- Tenn. Code Ann. § 66-1-103.
- Bryant v. Bryant, 522 S.W.3d 392 (Tenn. 2017).
- Tenn. Code Ann. §§ 67-4-409(a)(5) and (6).
- Tenn. Code Ann. § 66-5-103(1)(B).
- Tenn. Code Ann. §§ 67-4-409; 8-21-1001.