What is the Difference Between General and Special Deed?
What is the Difference Between General and Special Deed?
When you buy property or land and plan to build a house or commercial building. You need to have the necessary documents to ensure ownership. These documents are called deeds; which serve as proof of ownership. When you transfer your property from one person to another; their type determines how the deed is executed. There are two types of deeds: general and special. Both these documents convey the same information but in different formats depending on your needs and circumstances. Here is an explanation of each type of deed and their primary differences:
What is the Difference Between General and Special Deed?
What is a General Deed?
A general deed transfers all your interest in the property to the new owner. It is a simple, straight sale of the property without any warranties or promises. This type of deed is sometimes called a warranty deed or a deed of sale. This deed is only recommended when there are no other parties involved; such as with a family sale where no financing is required.
What is a Special Warranty Deed?
A special warranty deed is a transaction in which the seller promises to make the buyer whole if there are any problems or defects with the title after the acquisition. In other words, the seller promises to make good any problems with the title. This type of deed is most common for real estate sales that involve financing. Special warranty deeds can be used for both residential and commercial real estate sales, but they must meet certain requirements set by state law.
What is the Difference Between General and Special Deed?
Differences Between General and Special Warranty Deed
The main difference between general and special warranty deed is the extent of the seller’s promise to the buyer. A general warranty deed does not contain any promises to the buyer; while a special warranty deed includes promises about the title; such as that there are no liens or other claims against the property. Another difference between general and special warranty deed is that special warranty deed allows the buyer to remove the seller’s liens from the property. General warranty deed terminates when there is an action by the seller. This means that the seller can end the warranty at any time. Special warranty deed terminates only when there is an action by the buyer. The seller of the property must disclose certain information about the title in both types of deeds.
Conclusion
A general warranty deed and a special warranty deed both transfer interest in real property from one party to another. The difference between the two types is that general warranty deed does not include promises about the title; while special warranty deed includes promises about the title; such as that there are no liens or other claims against the property. Both types of deeds require the seller to disclose any defects in the title that would prevent a buyer from obtaining title insurance.