In any Texas real estate transaction, you will encounter a “deed.” There are several different kinds of deeds, but the most commonly found in Texas are the following: general warranty deed, special warranty deed, deed without warranty, and quitclaim deed.
GENERAL WARRANTY DEED
A general warranty deed is the most inclusive deed, containing both express and implied warranties. This is the preferred deed for buyers because it expressly warrants the entire chain of title and requires that the grantor defend against title defects, even if the defects existed prior to the grantor’s ownership. Thus, the grantor warrants that the property is free and clear of all claims, whether arising before or during the grantor’s period of ownership of the property.
This type of deed provides the best protection for the grantee. It’s the best type of deed if the grantee is foregoing title insurance, although coupling a general warranty deed with title insurance provides optimal protection. Residential properties are typically conveyed by a general warranty deed.
SPECIAL WARRANTY DEED
A special warranty deed is the answer for a grantor who does not feel comfortable granting a general warranty deed. A special warranty deed is more limited than a general warranty deed. It only warrants that title is free and clear from other claims during the time period of the grantor’s ownership. It does not offer any protection for claims arising prior to the grantor’s ownership. This type of deed is generally acceptable if the grantee is obtaining title insurance and the grantor will not warrant title prior to the grantor’s period of ownership of the property. Commercial properties are commonly conveyed by special warranty deeds.
DEED WITHOUT WARRANTY
The next major deed in Texas is a deed without warranty (or warranties). This type of deed is a conveyance of real property without any warranties. This type of deed is not advised because it could purport to transfer the entire interest when it actually doesn’t. Grantees should only accept this type of deed as a last resort. However, this deed is commonly used to clear up past title problems and can nevertheless be effective in transferring ownership.
The last major deed in Texas technically is not a deed. A quitclaim does not actually convey anything. It is more of a release, where the signer is in effect releasing or relinquishing any claim of title to the transferee. Instead, in a quitclaim deed, the signer releases and relinquishes any claim of title in the property to the transferee. Many title companies will not give credence to quitclaim deeds in the chain of title, and they should not be used. Deeds without warranty should be used instead of quitclaim deeds.
There are several other types of deeds in Texas, but the four most common ones are discussed above. Deeds in estate planning vastly differ from real estate deeds and serve specialized purposes. For more information, please contact the Kazi Law Firm today.