General Warranty Deed Form

When to Use a General Warranty Deed

Any type of deed transfers property, but legal and financial risks are distributed differently between the old and the new owners. Despite most states requiring a deed to be recorded, USA registration is not constitutive. It means that the registration does not complete the transfer of property. A deed is recorded with a land register to let the general public and various financial organizations know who the owner of the property is and to reduce the possibility of fraud.

The fact that a deed is registered does not necessarily mean that there were no problems with previous property transfer acts. It is essential to check that there were no gaps in the property history, that all taxes were paid, and there are no other debts related to the property. It is quite a complicated task to fulfill.

Real estate transactions

When two parties who do not know each other well transfer some property for money, the general practice is to use a warranty deed form. At the same time, the seller agrees to sign a warranty deed when he or she is well aware of the property history. By signing it, the person takes full responsibility for everything that occurred before he or she became an owner.

To be sure that the title is free from any claim before purchase, it is in the interests of a buyer to carry out a title search in advance. For example, the purchaser needs to be sure that there is no mortgage on a house or that last year’s property tax was properly paid. In other words, he or she tries to check that they can trust a present owner and they are not engaged in any kind of dishonest behavior or negligence.

The problem is that a property seller might not be aware that something illegal might have been done in the past, either with an intention or by mistake. If it is discovered later, the legal rights might be challenged, or the title becomes unclear. When the property is conveyed with a general warranty deed, such events will definitely disturb the new owner’s peace, but the old one will bear all the associated costs.

Not registering a deed might result in some discrepancies in tax accounting. A warranty deed needs to be registered in a Registration Office, but it does not give any warranties to a beneficiary. A general warranty deed is the best type of deed for this party since it takes the risk of possible encumbrances away, contrary to other deeds.

General Warranty vs. Special Warranty Deed

The difference is that with a special warranty deed, a seller guarantees that there were no encumbrances during his or her ownership. Such a document is less desirable for a buyer since it gives less protection. A seller might insist on such a form when the grantor owned the property for a short period, they do not possess enough information about it, and acquired it with a document that does not guarantee the real property against third-party claims. Naturally, the seller does not want to cover the risks of the purchaser if any claim appears in the future. If the grantee discovers some problems in the property history after the warranty deed is signed, he or she will be the one to solve them.

Some states do not recognize special warranty deeds as legitimate, and the only document to use in this case is a general warranty deed form.

What Is a Statutory Warranty Deed?

A statutory warranty deed is a shorter form of a warranty deed. It does not contain a promise to defend a title against all claims, but the guarantee is assumed and can be legally claimed. Although the form is different, both documents imply the same thing. Both give maximum protection to a buyer of a real estate object.

Since the shorter form is simpler but gives the same safety, it is quite common.

What Should Be Included in a General Warranty Deed?

This warranty deed should include:

• The names of the parties who alienate and receive a real estate object. The person who conveys the property is called a grantor. He or she guarantees the one who receives it, a grantee, against any risk of encumbrances. There are cases when the grantor who owns the property and the grantee are the same person. There could be multiplied beneficiaries in a deed. For example, the house owner might want to share it with a child; then, they can name themselves as a grantor and his child and himself as two grantees.
• Precise characterization of the property being transferred, called legal description. It is vital to have the address and/or parcel number specified correctly to make the deed legitimate. The parcel number has to be carefully checked with registration authorities to avoid possible mistakes.
• The amount of money paid for the property, if it is being sold, is called consideration. It has to be mentioned even if the property is transferred as a gift. Under such circumstances, commonly, it equals a token $10.
• In the states where it is required that a grantor signs a deed in presence of another person, a line where witnesses have to sign is added. For example, in Florida, warranty deeds have to be signed in front of two witnesses, while in New York State, there is no need for a witness to sign a document at all.
• Typically, general warranty deeds are verified by countersigning and contain a notary field where a notary public signs.

Some additional fields might be included when necessary:

• The grantor might include some rights of using the property after transferring it to the grantee. Such stipulations, if included in a deed, are called easements.
• The property owner might issue a deed that lets him use it until his or her death by adding life estates into the document. Then, the grantee becomes a remainderman who has the legal right to the property but cannot use it until the seller’s death. The person who uses it is called a life tenant. He or she does not have any authority to sell the property. Contrary to a will, the advantage of applying this legal form is that when the life tenant dies, the property does not become part of his or her estate and does not have to go through probation. It is immediately transferred to the remainderman. The danger of such a covenant for the life tenant is that the grantee’s debts unrelated to the property can result in a lien placed on the property while the life tenant is still alive and using it. The life tenant is responsible for paying taxes, but if he or she fails to do it, the beneficiary is charged.
• The grantor can also stipulate their right to use the land’s subsurface resource by claiming mineral rights in warranty deeds.

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