Four types of deeds are commonly encountered in Texas. They are general warranty deeds, special warranty deeds, deeds without warranty, and quitclaim deeds. As discussed below, quitclaim deeds aren’t technically deeds, but they are included in this article as a type of deed because they are commonly encountered and widely known by the public, who oftentimes requests them. Other types of deeds, such as trustee’s deeds, deeds in lieu of foreclosure, and transfer on death deeds are outside the scope of this article.
The first type of deed is a general warranty deed. In a general warranty deed, the grantor warrants to the grantee that the entire chain of title to the property is free and clear of any other claims, whether arising before or during the grantor’s period of ownership of the property. This type of deed provides the best protection for the grantee. It’s the best type of deed if the grantee is foregoing title insurance, although coupling a general warranty deed with title insurance provides optimal protection. Residential properties are typically conveyed by general warranty deed.
The second type of deed is a special warranty deed. Whereas a general warranty deed warrants the entire chain of title, in a special warranty deed, the grantor warrants to the grantee that the chain of title to the property is free and clear of any other claims arising during the grantor’s period of ownership of the property. There is no protection for claims arising prior to the grantor’s period of ownership. This type of deed is generally acceptable if the grantee is obtaining title insurance and the grantor will not warrant title prior to the grantor’s period of ownership of the property. Commercial properties are oftentimes conveyed by special warranty deed.
The third type of deed is a deed without warranty. In a deed without warrantor, the grantor does not make any warranties. Deeds without warranty are typically used to clear up past title problems.
The fourth type of deed is a quitclaim deed. As mentioned above, a quitclaim deed is technically not a deed at all because it does not convey anything. Instead, in a quitclaim deed, the signer releases and relinquishes any claim of title in the property to the transferee. Many title companies will not give credence to quitclaim deeds in the chain of title, and they should not be used. Deeds without warranty should be used instead of quitclaim deeds.
Retaining an attorney to assist with the deed allows for the inclusion of custom provisions, such as assignments, as-is clauses, reservations, and exceptions. The inclusion of additional provisions can turn the deed into a contract as well as a conveyance, providing additional value to one or more of the parties.
Deeds are just one of the sometimes many documents Johnsen Law prepares as part of a real estate transaction. Contact Johnsen Law to learn more.