Statutory Warranty Deeds – what are they?

Statutory Warranty Deeds:

The Standard Purchase and Sale Agreement contain a paragraph clause which reads substantially as follows:

Conveyance: This Agreement is for conveyance of fee title, title shall be conveyed by Statutory Warranty Deed free of encumbrance and defects except those noted herein or otherwise acceptable to the Purchaser.

What is meant or intended in delivering a Statutory Warranty Deed may come as a surprise to some of us. The key conveyance words are “Warrant” and “Convey”, which are vital elements included in the Statutory Warranty Deed and Warranty Fulfillment Deed (the document used when a Real Estate Contract has been paid in full). 

Some of warranties implied in the Warranty Deed are as follows:

1. The Grantor (seller) owns a fee simple estate without limitations that could result in losing that    ownership;
2. The Grantor has good right and full power to convey the land;
3. The land is free from all encumbrances that existed before this Grantor acquired that land;
4. The land is free from all encumbrances created since this Grantor acquired that land;
5. The Grantor warrants to the Grantee (buyer) and to heirs and assigns, the quiet and peaceable possession of such premises, and
6. The Grantor will defend the title to the land against all persons who may lawfully claim the same.

As you can see, some of these implied warranties cover you for items that only an owner of real estate would have actual knowledge or notice of beyond the record title. This is why it is so important for homeowners to protect and defend their property against off record encroachments. It is also a reason why the Real Estate Form 17 (Seller’s Disclosure Statement) should be completed as thoroughly as possible, since it protects the seller in the long run for full disclosure and gives notice to the buyer for any possible challenges that may not be covered by the title company.

In closing, remember, items not disclosed to the buyer, but known to the seller could very well be a breach of warranties implied or passed in the Deed and therefore must be disclosed by the seller.