The title to real property may be changed by using a legal form called a deed. But which deed is right for you—a quitclaim deed or a warranty deed?
What does a warranty deed do?
Warranty deeds are different from quitclaim deeds in that the seller “warrants” or guarantees that he or she actually has a claim on the property and that the title is free of anything that could cause problems with the ownership of the property. The warranty deeds from Bradford Publishing include a phrase that says that the title is “free and clear from all former and other grants, bargains, sales, liens, taxes, assessments, encumbrances and restrictions of whatever kind or nature soever.” Because of this warranty, a seller who signs this warranty deed can be held legally responsible for any title problems.
Despite this, most properties have a few restrictions that will be passed along with the title to the new owners and listed on the deed. These might be taxes that will still be charged after the sale, covenants, and any easements. Exceptions like these usually won’t cause any problems with the sale and can be found on the title insurance policy or title commitment.
Different types of warranty deeds give different protection.
There are two different types of warranty deeds: general and special. A general warranty deed warrants title for the entire life of the property. If your great-great-great-grandfather got the title to the property from the government as a homestead, the general warranty deed will guarantee that there are no problems left over from any time in the title’s history.
This is different from a special warranty deed, which will only warrant title for the amount of time that the current owner has owned the property. If Joshua has owned a piece of property for two weeks, a special warranty deed would only guarantee that he didn’t do anything during his two weeks that would mess up the property’s title. If the owner before Joshua left an unpaid mortgage on the title, Joshua wouldn’t be responsible. Special warranty deeds are frequently used when a seller acquires real property after a foreclosure.
Bradford has more than 20 different Colorado deed forms. To help narrow your choice, read Bradford Publishing’s blog on “Understanding Quitclaim Deeds” and the upcoming blog on joint tenancy vs. tenants in common. If the property is part of an estate or owned by a company or corporation, stay tuned for this series final blog on “Deeds for Every Situation.”
For more information about warranty deeds, check out Bradford Publishing’s guide, “Understanding Colorado Quitclaim and Warranty Deeds.”