What’s the Difference Between a General Warranty Deed and Special Warranty Deed?

In Virginia, when you pick your settlement agent (an attorney) to represent you in the purchase of a piece of real estate, part of their job is to do a title search. The title search is research of public records and any court decisions, if appl., to disclose facts concerning ownership of the property. Basically they want to know if the people selling the property actually have the sole right to sell it. They do this for the past 60 years for that specific property.

In a regular transaction with Mr and Mrs Seller, they will be giving you a General Warranty Deed. This means they’re telling you they have no knowledge of any title defects, including liens against the property, both from the time they’ve owned it and before that. They warrant clear title from any and all defects.

However, say the property is held in an estate, trust, LLC, or is a bank-owned property. They will likely convey the property to you, Mr. and Mrs. Buyer, via Special Warranty Deed. This means they’re ONLY warranting title from the time they’ve owned it, but make no claims to know anything before that. This is also used by an entity who has never actually lived in the property. Whether it’s a flip, or the result of someone passing, or a foreclosure, the people now selling it don’t know if there’s anything wrong with the title!

There’s nothing really disadvantageous about one versus the other, since you really should be buying title insurance anyway. Title insurance protects your interest in the property as the owner, in case someone files a claim against the property. It’s also insurance against loss or damage as a result of defect in title ownership to a particular piece of property.

For more information on this and other issues regarding title, read Monarch Title’s Home Buyer Guide or you can always email me.