Should Your Buyer Check The “General Warranty Deed” Box?

The 2019 Contract forms default to “Special Warranty Deed” as the deed type.  As the buyer, would you want a “General Warranty Deed? What’s the difference?

Three Common Types of Deeds

Colorado recognizes several types of deeds to transfer real property. I’m going to discuss the three most common types: General Warranty Deed, Special Warranty Deed, and Quit Claim Deed. Just from the names, you might guess that a buyer would probably want something with the word “warranty” in the title. Warranty sounds a lot better than “Quit.” Nobody likes a quitter. But which is better for the buyer, a “special” warranty or a “general” warranty. Although receiving something “special” might sound better, in the case of a buyer of real property you probably want a “general” warranty.

General Warranty Deed

The form of general warranty is actually dictated by the Colorado legislature at C.R.S. 38-30-115. In substance, it’s a transfer by the grantor that promises three things (1) that the grantor is the owner with full power to sell, (2) that the property is transferred free and clear of encumbrances (except those identified), and (3) that the grantor will defend title against anyone claiming an interest in the property. The third promise is what differentiates a general warranty deed from a special warranty deed.

Special Warranty Deed

With a general warranty deed the warranty language states “and warrants title to the same.” This means that the warranty of title is going way back in time to people who might claim an interest in title before the seller bought the property.  With a special warranty deed, the language is changed to “and warrants title to all persons claiming under me. This “under me” part means that the warranty is limited to claims against title during the time the seller owned the property, and not before.

Wouldn’t it be nice if the special warranty form simply said, “ this warranty is limited to claims related only to when I held title”? Oh, but that would be too easy. We used to say in law school that we were learning to be interpreters of a different language. The phrase “under me” in the special warranty deed is the perfect example.

Quit Claim Deed

By contrast to a warranty deed, a quitclaim deed warrants nothing. Instead of the magic words “sell and convey” a quitclaim deed uses the words “sell and quitclaim.” A quitclaim deed also contains no warranty language. The legal effect is that a quitclaim deed simply transfers whatever interest the grantor has in the property. That interest may be something, but if it turns out to be nothing the grantor is not on the hook to defend title.

Special thanks to First Alliance Title for putting this info together for us to share!