Buyer Tip: Know your Deeds

Buyer Tip: Know different forms of Deeds
August 26th, 2010 11:15 AM

There are three types of deeds that exist under current Washington State Law: The Statutory Warranty Deed, the Bargain and Sale Deed and the Quit Claim Deed. Each type is described below.

The Statutory Warranty Deed conveys all of the Grantor’s (seller) right, title and interest in the property. It also creates, at the time of delivery, the following statutory warranties in favor of the Grantee (buyer):

a. that the Seller owns an indefeasible estate in fee simple (a FEE SIMPLE ESTATE is  A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration)

b. that the Seller (Grantor) has the complete right and power to convey the estate

c. that the estate is free from all encumbrances

d. that the Seller(Grantor) is entitled to quiet and peaceful possession of the premises

e. that the Seller (Grantor) will defend the title against all persons who may lawfully claim the same title.

If there are any encumbrances against the title, they must be called out as special exceptions from the warranties contained in the deed, otherwise, the Grantor would be liable for breach of warranty. This is why most sellers obtain title insurance, as protection, prior to selling a property. Title insurance will often cover the cost to clear up encumbrances and make the title “marketable”. Common types of special exceptions, or claims against the title, to look for when you purchase a property  are: adverse possession, prescriptive easements and zoning violations.

Once your offer is accepted by the seller you, as buyer, will receive a copy of a preliminary title report within a few days of mutual acceptance.  It’s important to review this document with the title officer, real estate broker and an attorney, if necessary.

Bargain and Sale Deed is also referred to as a Special Warranty Deed or Limited Warranty Deed. It conveys all the Seller’s (Grantor’s) right, title and interest in the property. It also creates, as of the date of delivery, only the following warranties in favor of the Buyer (Grantee)

a. that the Grantor owns in indefeasible fee simple estate in the property described

b. That there are no encumbrances arising by or through Grantor, and that the Grantee (buyer) will enjoy quiet and peaceful possession against the Grantor and Grantor’s heirs and assignees.

a Bargain and Sale (Special Warranty or Limited Warranty) Deed differs from the Statutory Warranty deed in that the Grantor limits the scope of warranty so that they only include encumbrances created, permitted or suffered by the Grantor (seller) and not those of prior owners. The Bargain and Sale Deed is typically given by an Estate, Trustee in Bankruptcy or a Lender who has acquired title through foreclosure.

Quit Claim Deed. The Quit Claim Deed conveys, without warranty, all of the Grantor’s right, title and interest in the described property. In short, it conveys whatever interest the Grantor held, which could be no interest at all. My clients have used quit claim deeds when, for instance, they are married, but husband or wife wants to purchase a property as sole owner. If wife wants to own, the husband, signs a quit claim deed which conveys his ownership to his wife.

If you, as a buyer, are thinking of purchasing a property, where you take title in anything other than a Statutory Warranty Deed, I recommend meeting with an attorney experienced in these issues, prior to starting your property search.

I have learned a great deal from two local Law Groups, who I would highly recommend:

Galvin Law Group, Dale Galvin principal 425-248-2163

Triad Law Group, Chuck Greenberg, principal 425-329-4337