Deeds are written documents used to transfer title to real estate from the owner or "grantor" to a new owner or "grantee." The different types of warranty deeds all offer some degree of guarantee that the title is legitimate, in contrast to quit-claim deeds, which give no guarantee. All legal deeds must include the names of the parties, the legal description of the document and the grantor's signature, and must be notarized.
General Warranty Deed
A general warranty deed offers the highest level of protection, according to the Bankrate website. A general warranty deed states that the grantor has legal title to the property; that the title is superior to any claims someone else may make on the property; and that neither the grantor nor any previous owner has done anything that would impair the grantee's title, such as not disclosing easements or debts attached to the property. If the grantee discovers an impairment after accepting title, the grantor can be held legally liable for damages.
Special Warranty Deed
A special warranty deed offers more limited protection than a general warranty, according to the Investor's Title Company. A special warranty guarantees only that the grantor has done nothing himself to impair the title, but makes no promises about what previous owners may have done. If there's a title problem under a general warranty, the grantor's title insurance will cover any liability costs, but not with a special warranty, so the grantee may find getting financial restitution a lot harder. Special warranties are more likely to be used when transferring commercial property than in residential home sales.
Some states, such as California, use another form of deed, the grant deed, to serve in the place of a special warranty deed. The grant deed, according to Real Estate Lawyers, offers an implied warranty rather than the explicit guarantees in a warranty deed. The implied warranties are a "covenant against conveyances"--a guarantee the title has not been transferred to someone else--and a "covenant against encumbrances" that guarantees the property isn't subject to any undisclosed easements or claims. Although the warranties in a grant deed are implied, they're still legally binding.
- Countryside land image by Rose from Fotolia.com