A Legal Introduction to Warranty Deeds

"Real Estate," as a term for land, dates from a time when the English king owned all the land. This was "royal ownership" - "real" being a term meaning "royal." In ancient history, land ownership was transferred with a special verbal ceremony in the presence of witnesses with a twig or a piece of sod cut by the seller and symbolically handed to the buyer. "Feoffment with Livery of Seisin" meant the relinquishment of all ownership rights with a ceremony to transfer possession. The Bible in Genesis 23 describes elements of an ancient ceremony. Between approximately 1550 and 1650, a written ownership transfer document developed as an alternative to the ancient verbal method. Finally in 1677, the English Parliament mandated that contracts involving transfers of land ownership be written (Statute of Frauds) since perjury concerning oral agreements was being committed in court.

A deed documents transfers of purported land ownership from the grantor (seller) to the grantee (purchaser). Of course, anyone is able to create a document (forgeries improve with advances in technology) and the existence of a deed does not prove actual ownership. Always consult an experienced attorney in specific real estate transactions.

Since traditional deed language became standardized in England in the 1600s (the time of Shakespeare and the King James Bible), many phrases sound archaic. Because these phrases have such a long history of judicial interpretation, prudent attorneys continue to use them, rather than experiment with untested language. Many states have legislated statutory deed forms, many of which continue the traditional language. Additionally, State Bars (attorney associations) have created standardized forms to simply the deed preparation process and avoid unnecessary errors.
The traditional general warranty deed contains certain implicit (unwritten) guarantees (covenants) by the grantor. These are:

1. That the grantor possesses the power to convey ownership (Covenant of Seisin).
2. That the grantor has valid title to the land (Covenant of Right to Convey).
3. That the transfer of the land is made without any encumbrances (liens, etc.), other than those previously disclosed (Covenant Against Encumbrances).
4. That the grantee will enjoy the land without being evicted by a superior title (Covenant of Warranty).
5. That the grantee will not be disturbed in her or his possession of the land by future claimants (Covenant of Quiet Enjoyment).
6. That the grantor will take affirmative steps to cure any defects in the grantor's title (Covenant of Further Assurance).

The general warranty deed extends these warranties as far back in time as there is a publically recorded record of title. In contrast, a special warranty deed makes warranties only for the time period in which the grantor owned the land. A special warranty deed might be recognized by language such as, for example only, "... when the claim is by through and under the Grantor but not otherwise... ." Not all states recognize all of the traditional covenants listed above. Consult an experienced real estate attorney to determine the status of these deeds and covenants in a given state.

The seller (grantor) must sign the deed. Frequently the seller's spouse must also sign the deed due to homestead and community property laws. In order to record the deed in public records, such as a County Clerk or Registrar of Deeds office, the signatures must be notarized. This is designed to reduce the possibility of forgery.The deed is valid between the grantor and grantee without being recorded. Recording gives public notice of one's claim of ownership and is virtually always desirable.

To avoid uncertainty, the grantor's name on the deed should match the name on the previous deed when the present grantor was a grantee. Full legal names are desirable. Sometimes, while not mandated, Social Security numbers or driver's license numbers are included on deeds and these may be removed (redacted) when the deed is recorded. Likewise, some deeds include addresses.

One should always check the language in the real estate sales contract against the language in a proposed deed. For example, if mineral interests are involved, these need to be appropriately mentioned in the deed. Is the right type of deed being prepared, given the language in the real estate sales contact? Without careful examination, the wrong deed form may be used. If the real estate sales contract is ambiguous, it is critical that it be clarified and re-signed. An experienced real estate attorney will examine these potential issues prior to closing.

Most states require that the actual purchase price be disclosed although a few states do not. In "non-disclosure" states, the deed may read, for example, "... for and in consideration of $10 dollars, to me in hand paid... ."

A legal description of the land that a licensed surveyor is able to physically locate and follow to closure (in a complete circle back to the point of origin) on the ground is absolutely essential. Do not take shortcuts with a street address, a property tax description, or a kitchen table homemade survey. Inadequate legal descriptions are a reoccurring legal problem. Court action or, more simply if possible, correction deeds are required to remedy legal description problems. Repeatedly proofread the names on the deed and also the legal description.

If there is seller or third party financing involved in the purchase, this will need to be appropriately referenced in the deed. Also, the dates on the deed, mortgage instrument, and promissory note must be identical. A discussion of mortgages, deeds of trust (a type of mortgage that may be foreclosed without going to court), and promissory notes is beyond the scope of this brief comment. Utilize an experienced real estate attorney to prepare all documents.

Since grantors may be deceased, disappeared, or have inadequate financial resources to pay a financial claim based upon the warranties discussed above, title insurance is common. Title insurance is required by virtually all mortgage lenders. A discussion of title insurance is beyond the scope of this brief comment.

In a specific situation, precisely what landowner rights does a purchaser under a warranty deed acquire or not acquire? This requires a title examination and a physical inspection of the property. Preexisting claims such as outstanding unpaid mortgages, unpaid property taxes, and current easements still exist after the purchase. Mineral and water rights may have previously been sold or are subject to government regulation. Adverse possession claims (occupancy and usage with a claim of exclusive ownership) exist without a recorded title document and may have already ripened so that a third party possessor in fact owns the property. Existing property boundary fences may be in the wrong location but also, through adverse possession, be the current legal boundaries. Land usage issues such as tenants, adverse possessors, easements, roads, short-cut paths, and fences require a physical inspection of the property. These are a few examples of many situations that a warranty deed may not overcome.

Additionally, forgeries, secret marriages, invalid divorces, missing heirs, and outright fraud are all possible even with great care being taken. For the ordinary person, a home purchase is her or his greatest transaction and one should not cut corners. A warranty deed is the preferable way to acquire title and a purchase of title insurance, even if not required, is desirable.

A survey by an appropriately licensed surveyor may be appropriate, particularly when a new subdivision or rural acreage is involved. As strange as it seems, sometimes a new house is built on the wrong lot. Mortgage lenders frequently require a survey. Again, utilize an experienced real estate attorney.

This comment provides a brief and incomplete educational overview of a complex topic and is not intended to provide legal advice. Always utilize an experienced real estate attorney in specific situations.