One of the most important documents you will ever have in your life —other than your Last Will and Testament (“Will”) of course— is a deed.
You may have heard of some of the different types of deeds: warranty deeds, special warranty deeds, quitclaim deeds—but what are these different types of deeds?
In today’s post, we’ll take a brief look at some of the different types of deeds—including special warranty deeds.
What is a Deed and What Does It Do?
When it comes to Florida real estate, and, indeed to real estate anywhere, the document you need to buy, sell, or otherwise transfer property, is a deed.
A deed is the official written instrument (think rolled up white velum wrapped with a red ribbon) that gives you legal ownership of real property.
A deed contains the legal description of the property and conveys the title of ownership in the property.
What is the Difference Between a Deed and Title?
Before we go further, however, it is important to understand that a deed is one thing and a title is another.
And, while closely related, never should the two be confused.
Title to real property (or to personal property) refers to the legal ownership rights a person has in that property.
A deed, on the other hand, is a legal document that conveys title (i.e., ownership interests) from one person to another.
A deed does not create a title, it merely conveys whatever title the grantor has to the grantee.
The title is what gives someone the legal right to the property itself—including the right to sell it.
So, for example, a person can have a life interest in property; meaning that he or she owns the property only for his or her lifetime. Once he/she dies, the property passes to another.
Or, someone can have only a percentage or joint interest in the property, which may limit his or her right to sell or encumber the whole. In other words, s/he may only have the right to sell or encumber her/his percentage interest in the property.
Different Types of Deeds Convey Different Types of Interests.
Because deeds transfer the ownership rights of property, and there are a number of ways to hold title to property, there are several types of deeds.
Florida law has specific requirements that warranty deeds must meet.
Not all deeds are warranty deeds, however (see below). Whether a deed is a warranty deed or not matters because a warranty deed (general or special warranty) provides certain assurances and guarantees, whereas a deed that is not a warranty deed does not.
The most common types of deeds in Florida are:
- General Warranty deeds
- Special Warranty deeds, and
- Quitclaim deeds
Because it is the deed that transfers property interests, it is important to understand what type of title each one of the deeds listed above transfers.
So, let’s look at each one in turn.
Warranty Deeds in Florida
A Florida Warranty Deed “warrants”—or guarantees—title to property.
A warranty deed can be either a “general” warranty deed or a “special” warranty deed.
General Warranty Deed
A general warranty deed guarantees that the person transferring the property has full title to it and is the sole owner of the property, with the right to sell it.
It also guarantees:
- That the property is free and clear of all liens and outstanding claims
- That title will withstand any claims of ownership by third parties
- That the grantor (i.e., seller of the property) is legally responsible for any breach of the warranty of title.
A “general” warranty deed gives a full warranty of title.
Special Warranty Deed in Florida
A special warranty deed still “warrants” good title. However, it provides a more limited guarantee.
While a special warranty deed conveys fee simple title and provides the same five covenants of title that a general warranty deed does, to wit:
- the covenant of seisin
- covenant of the right to convey
- covenant against encumbrances
- covenant of quiet enjoyment, and
- covenant of general warranty
However, unlike a general warranty deed, a special warranty deed provides these covenants only as to the time period during which the seller owned the property.
In other words, a special warranty deed only guarantees that no title issues arose during the time that the prior owner owned the property.
It guarantees nothing as to any other timeframe for the property.
Because of this, the title conveyed by a special warranty deed is not as good as title conveyed by a general warranty deed.
Although the guarantees in a special warranty deed are limited, certain provisions in the deed may constitute “covenants running with the land.”
This deed guarantees nothing. It merely conveys whatever title the grantor has.
As such, a quitclaim deed gives no guarantee at all of title.
(By the way, there is no such thing as a “quick” claim deed. This is not just semantics. If someone tries to sell you a “quick” claim deed online or elsewhere, you need to know that no such thing exists and that you may be being defrauded.)
At SJF Law Group, we routinely see quitclaim deeds used for intra-family transfers.
We also see a lot of them being prepared as a “do it yourself” project by non-attorneys.
Samantha J. Fitzgerald frequently cautions her clients in Plantation, Florida that a deed is far too important a document for non-lawyers to be playing around with. Most people will make drafting mistakes that are costly and irretrievable.
Many people don’t understand that a quitclaim deed conveys only whatever title the current owner may have. And, most importantly, it does not guarantee that there are no claims against the property.
This means that if for any reason the current owner has NO title to the property, or if there are a zillion claims against title, then that is what a quitclaim deed conveys —absolutely nothing—and a whole lot of title claims.
The person giving the quitclaim deed makes no warranties or guarantees at all—and the person taking the quitclaim deed (i.e., you)—has no legal recourse against him or her for any title issues or claims.
Plus, a quitclaim deed may void your title insurance policy.
The moral of the story here is, just because you can buy a legal form at Office Depot or download it online and fill it out yourself, doesn’t mean that you should.
Especially when it comes to something as important as the deed to your home, please, get some legal advice before you consider taking or giving a quitclaim deed.
Protecting Your Family is Just a Phone Call Away.
If you are thinking of making a transfer of Florida real estate as part of your estate planning, call us. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well. When you work with the estate planning attorneys at SJF Law Group, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.