Special Warranty Deed vs. General Warranty Deed
Both deeds make you the full owner of the property. The difference is how far back in time the seller promises (Warrants) that the title is free and clear from all encumbrances, except as disclosed.
NARROWER PROMISE Special Warranty Deed The seller stands behind their years only
BROADER PROMISE General Warranty Deed The seller stands behind the full history
Covers only problems that came up while this seller owned the property If a problem traces back to an earlier owner , the seller is not responsible for it Common in commercial, investment, new construction and bank-owned sales
Covers problems from any point in the property's past , not just the seller's years The seller answers even for a mistake made decades ago , before they bought The most common deed in Colorado residential resales
Both deeds carry the same three promises under Colorado law: the seller owns the property and has the right to sell it, there are no hidden claims beyond those listed in your deed, and they will defend your ownership. Only that last promise narrows with a Special Warranty Deed.
Where you are most likely to receive a Special Warranty Deed
Bank-owned and foreclosure sales The lender never lived there and will not vouch for the years before foreclosure. Commercial and investment property Corporate sellers cap their exposure as a matter of policy.
New construction
Estate and trust sales
Government and municipal transfers Public agencies limit warranties to avoid long-term liability. Builders and developers limit their promise to the years they held the land.
An executor or heir cannot speak for decades they were never part of.
Investor-to-investor sales
Frequent in wholesale and distressed- asset transactions.
HOW TITLE INSURANCE CLOSES THE GAP A Special Warranty Deed leaves the property's earlier history outside the seller's promise. An owner's title insurance policy is what covers that stretch of time. Depending on your policy, it can:
Pay to defend your ownership if someone brings a claim against it Address old liens and judgments that were never properly released
Respond to title problems that began before the seller owned the property Cover forgery, fraud and unknown heirs in the property's past
Coverage is governed by the terms, conditions and exceptions of the policy issued. Your closer can walk you through exactly what yours covers.
WHAT THIS MEANS FOR YOU Either deed makes you the full owner - one is not a “lesser ˮ deed. The deed sets how far back the seller's promise reaches ; an owner's title insurance policy is what can cover the rest. Your purchase contract states which deed you will receive, so ask your agent before you sign.
QUESTIONS ON YOUR NEXT CLOSING? CONTACT YOUR FIDELITY NATIONAL TITLE SALES REPRESENTATIVE.
Fidelity National Title Colorado www.fntcolorado.com
13 | © Fidelity National Title Company Colorado Provided for educational purposes only and not intended as legal advice. Deed selection and its consequences depend on the specific facts of each transaction. Statutory references are to C.R.S. 38-30-113 and 38-30-116.5.
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