Utah Real Estate Code 57-1-12.5 Form Of Special Warranty Deed — Effect.
(1) Conveyances of land may be substantially in the following form: SPECIAL WARRANTY DEED ____ (here insert name), grantor, of ____ (insert place of residence), hereby conveys and warrants against all who claim by, through, or under the grantor to ____ (insert name), grantee, of ____ (insert place of residence), for the sum of ____ dollars, the following described tract ____ of land in ____ County, Utah, to wit: (here describe the property). Utah Code Page 5 Witness the hand of said grantor this __________(month\day\year).
(2) A special warranty deed when executed as required by law shall have the effect of: (a) a conveyance in fee simple to the grantee, the grantee’s heirs, and assigns, of the property named in the special warranty deed, together with all the appurtenances, rights, and privileges belonging to the property; and (b) a covenant from the grantor, the grantor’s heirs, and personal representatives, that: (i) the granted property is free from all encumbrances made by that grantor; and (ii) the grantor, the grantor’s heirs, and personal representatives will forever warrant and defend the title of the property in the grantee, the grantee’s heirs, and assigns against any lawful claim and demand of the grantor and any person claiming or to claim by, through, or under the grantor.
(3) Any exceptions to a covenant described in Subsection (2)(b) may be briefly inserted in the deed following the description of the land.
Special Warranty Deed
A special warranty deed (also called a grant deed, covenant deed, or limited warranty deed) is a deed form that transfers property with a warranty of title limited to the period when the signing owner owned the property. A special warranty requires special language to ensure that the deed qualifies. This language is automatically included in all of our deeds.
How a Special Warranty Deed Works
A special warranty deed transfers title from one owner (called a grantor) to another owner (called a grantee). The title is transferred with a limited warranty of title. By signing the deed, the grantor promises that—for as long as the grantor has owned the property—nothing has happened that would cause title issues for the grantee. This promise also extends to others that may acquire title through the grantee. The grantor makes no promises about what may have happened before the grantor owned the property. Special warranty deeds place some risk on the grantor and some risk on the grantee. The grantor is legally responsible for any title issues that arose while the grantor owned the property. The grantee assumes the risk of any title issues that arose before the grantor owned the property.
Other Names for Special Warranty Deeds
Of all of the types of deeds, special warranty deeds have the largest variety of names. Depending on the state, special warranty deeds may be called grant deeds, covenant deeds, statutory warranty deeds, or limited warranty deeds. Each name refers to essentially the same document: A deed that makes the grantor responsible for title issues but limits the grantor’s liability to the period when the grantor owned the property.
The designation of a deed as a special warranty deed identifies the warranty of title. The warranty provided by a special warranty deed is limited in the sense that it only covers the period when the grantor owned the property. By dividing risk between the grantor and grantee, the limited warranty of title provided by a special warranty deed provides a middle ground between quitclaim deeds and warranty deeds.
• A quitclaim deed (also known as a quit claim deed and sometimes erroneously called a quick claim deed) provides no warranty of title. Because a special warranty deed provides a limited warranty of title, it provides more protection than a quitclaim deed.
• A warranty deed (also called a general warranty deed) provides a full warranty of title that extends to all time, including the period before the grantor owned the property. A special warranty deed does not provide this much protection. It only covers the period when the grantor owned the property.
In the sale context, the protection provided by the special warranty title has been supplemented and sometimes replaced by title insurance. Title insurance allows the grantor to avoid the risk of unknown title issues and provides the grantee with the protection of a solvent financial institution to look to if title issues arise. Special warranty deeds also differ from estate planning deeds, including life estate deeds, lady bird deeds, and transfer-on-death deeds. Each of these deeds is named after the estate planning and probate avoidance benefits it provides. Special warranty deeds, in contrast, are named after the warranty of title they provide.
Common Uses of Special Warranty Deeds
Special warranty deeds are often used in negotiated situations, where the grantor is uncomfortable with the liability associated with a warranty deed and the grantee wants more protection than a quitclaim deed. Common uses include:
• Transferring real estate to a trust—like a living trust—that the transferor controls or benefits from;
• Transferring real estate to a business—like a limited liability company—that the transferor owns;
• Selling commercial or multi-family residential property;
• Transferring property to a new owner that is purchasing title insurance on the property and is not concerned with the limited warranty of title; or
• In other circumstances where the current owner does not want to be legally responsible for problems with title that arose before the current owner owned the property.
How to Create a Special Warranty Deed
The legal basis for the validity of a special warranty deed depends on state law. In some states, a specific statute authorizes the creation of a special warranty deed. In others, special warranty deeds (called covenant deeds in) are accepted under common law. Even in states that provide statutory language, the deed must take into account the other elements of a deed. These features include:
• A valid legal description;
• A statement of the consideration changing hands or statement that the deed is without consideration;
• If there is more than one grantee, a statement of the manner in which the grantees will hold title;
• Recording requirements, including the correct font size, page margins, and other page format requirements; and
• Signature blocks and notary acknowledgments that comply with the statutory format.
When creating special warranty deeds, it is important to understand the legal basis and create a deed that meets the requirements of that state. Using a generic form is dangerous. A special warranty deed that is valid in one state may be a crime in another state. For example, Utah law makes it a crime to use the word “warranty” in any deed that does not convey a full warranty of title. An uninformed property owner using a generic, fill-in-the-blank form for a special warranty deed could become criminally liable for including the wrong language. Each deed created by our deed preparation service was designed by attorneys to comply with the requirements of the state where the property is located.
What Must Be Included in a Special Warranty Deed
Any type of deed has to contain the following information to be legal:
• Name and address of the person conveying the property, also known as the grantor
• Name and address of the person receiving the property, also known as the grantee
• Legal description of the property (which could be a description of property lines or a lot number), which you can find on the previous deed
• Statement that the grantor intends to convey the property to the grantee
To qualify as a special warranty deed, it must also say that:
• The grantor is the legal owner of the property and has the legal right to transfer the property.
• There are no outstanding claims against the property by any creditor or anyone else that were instituted during the grantor’s ownership period.
• The grantor guarantees he or she has clear title only during his or her period of ownership and, if there is a problem with title during that period, the grantee is not entitled to compensation from the grantor. The guarantee does not cover the time period before the grantor owned the property.
When a Special Warranty Deed Is Used
A special warranty deed is common when a house has been foreclosed on by a bank because the previous owner did not pay their mortgage. The bank forecloses on the property and then sells it to a new buyer. The special warranty deed that the bank provides to the new buyer provides no protection for the period of time before the bank took ownership of the property.
Special Warranty Deed and Title Insurance
When a buyer purchases property under a special warranty deed, there is the possibility that a prior creditor or owner could make a claim against the property. The best way to protect yourself as a buyer is to buy title insurance when you purchase the property. The title insurance company will research the title to ensure it is clear and then provide insurance so that you have protection should there ever be an old claim that is brought against your title. A special warranty deed provides the buyer with some guarantees about title, but it does not offer complete protection. However, these types of deeds can be acceptable if other protections are put in place. You can find the right form to use by searching online for “special warranty deed” and your state’s name. If you want help in creating a special warranty deed or any other type of deed, you can use an online services provider to help ensure that everything is completed and filed properly. To own a property, you need specific real property documents to support your rights to the property. Real property includes any structures on the land, any person’s rights and interests related to the property, and natural parts of the land. As a property owner, it is important to understand what documents you need to verify your ownership.
Why Do I Need Proof of Ownership?
Proof of ownership is how you claim the rights to a certain property. In the late 1800s, proof of ownership expanded from a local matter to a national one, when the federal government created specific regulations for the process. By making it national, the process became simpler, and gave property owners an easy way to prove their rights.
A warranty deed is one type of proof of ownership; it shows the name of the owner and gives a brief description of the property. The previous owner or party granting you ownership signs the warranty deed, showing your rights to the property. A quitclaim deed is the other main type of property deed. Warranty deeds are the most common property deed for people to have but you can also have a quitclaim deed, which also proves ownership but can express that only the current owner has rights over certain parts of the property.
Bill of Sale
A bill of sale is another document that can serve as proof of ownership; it comes from the previous owner and shows the transfer of ownership. The bill of sale is essentially the receipt for the sale. It usually serves as the primary proof of ownership until the deed can be officially notarized.
When you get ownership interest in land, you should record the documents and deed at the local recorder’s office so that the information is available to the public. Because it is a public record, you can purchase copies of the record at any time. The record can serve as proof of ownership.
Deed of Trust
Some states require lenders to create a deed of trust when someone receiving a loan buys property using a mortgage. The trustee holds the property deed until the property owner can pay off the mortgage debt. The land owner can get a copy of the deed of trust, even if they have not yet finished paying off the debt. Though the deed of trust shows that the borrower does not have full ownership, it is proof that they will have ownership when they complete payment of the mortgage. A copy of a deed of trust is also available at the recorder’s office.
Some states have lenders create mortgage notes to secure a debt. The property owner gets the title to the property during closing and the person selling the property transfers ownership without needing to use a deed of trust. A mortgage note indicates that you own a property that has a mortgage lien. You can receive a satisfaction of mortgage letter when you finish paying off the mortgage debt. You can use it as proof that you own property.
Losing a Property Deed
If you lose your proof of ownership, you must get new documentation as soon as possible. While losing the property deed does not mean you lose the property, it can cause complications with your rights. You can get a new copy of the deed at your local county clerk’s office and have it notarized.
The process of establishing proof of ownership involves a series of steps. It also depends largely on the type of property and your relationship to the person claiming it. If you are the original owner and have been reported as the property owner, there are certain documents you must provide to prove it. Some of the documents include:
• Copy of driver’s license or another photo ID
• Copy of proof of Social Security number
• Proof of association with the property’s address such as a utility bill or driver’s license with that address
• Proof of business dealings between you and the reporting company
If you are claiming on behalf of a minor, are a guardian or trustee of the reported owner, or the heir of the deceased property owner, you must provide documents such as:
• Driver’s license and proof of Social Security number
• Proof of identity and ownership from the reported property owner
If there is more than one owner, each person much provides their personal information. Someone claiming on behalf of a minor must show the minor’s birth certificate. A guardian must have a copy of the legal letters of ownership. Heirs must have a copy of the deceased person’s death certificate, will, letters of administration, current Letters Testamentary, or copy of the trust agreement.
Utah Real Estate Lawyer
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