Statutory vs. Special Warranty or Bargain and Sale Deed - What's the difference?

When it comes time in the course of the transaction to transfer title from seller to buyer, a deed is normally required.  In a standard Purchase and Sale agreement, a Statutory Warranty Deed is the document most often requested to convey title from seller to buyer.  With a Statutory Warranty Deed, the seller expressly guarantees the grantor's good, clear title, and often carries the covenants concerning quality such as quiet enjoyment, the right to convey, freedom from encumbrances, and defense of title from all claims.  Our "Form 21," which is our Residential Real Estate Purchase and Sale Agreement, has a section called " The Condition of Title", which calls for title to be transferred via a Statutory Warranty Deed.

Other deeds that are used in special circumstances include Special Warranty Deed, where the grantor covenants to defend title against only those claims and demands of the grantor and those under the grantor (seller) and is often used by someone who is appointed to act on behalf of the true owner, such as a Personal Representative for an estate or other duly appointed person.  The specific language of this type of deed is contained in Limited Practice Board form 16-09.
 
If you receive a bargain and sale deed [LPB 15-05], you are typically buying land without knowing if there are any encumbrances on it, unless stated in the deed. The grantor only guarantees that they have title, and does not guarantee that the title is free of defects.  This type of deed is generally used by a bank, tax or government authority, or Personal Representative who did not occupy the land and does not know of any encumbrances.

This article is presented as a service for your benefit, with the help of my husband, David Hunnicutt, MAI, JD, real estate appraiser and attorney at law.  Should you have further questions please consult with independent counsel of an attorney of your choice.