Real estate deeds and their differences
Last week I discussed the difference between a deed and deed of trust. To refresh, a deed of trust secures payment of a borrower’s debt, in a similar fashion as a mortgage does. On the other hand, a deed is a legal instrument that transfers ownership of real estate. This week I will discuss the types of deeds that are commonly utilized in Colorado.
In their book Colorado Real Estate Practice, Willis Carpenter and Holly Hoxeng describe the five types of deeds defined and in use in Colorado. These deeds are as follows:
1. General warranty deed
2. Special warranty deed
3. Bargain and sale deed
4. Quitclaim deed
5. Confirmation deed
The difference between these types of deeds is in the degree of protection or guarantee that the grantor promises or warrants to the grantee.
General Warranty Deed
Under a general warranty deed, the grantor guarantees the title to the real property against any defects existing before the grantor acquired title as well as during the time of the grantor’s ownership. It’s often stated that the grantor guarantees title for “all of time”. This is the greatest form of protection that can be provided by a deed.
Special Warranty Deed
Unlike a general warranty deed, under a special warranty deed the grantor guarantees and warrants title only against defects arising during the time the grantor owned the real property.
With a quitclaim deed, the grantor guarantees nothing, and the deed only conveys whatever interest the grantor has any the property, if any interest at all.
Bargain and Sale Deed
A bargain and sale deed conveys the real property as well as any after-acquired title thereto, but contains no guaranties or warranties of title.
In a few limited situations (death, foreclosure), title passes by statute to designated grantees (heirs, successful bidders, redeeming parties), and a deed is required by statute to evidence the transfer of title on the public record.
Buyers and sellers should consult with a real estate attorney to determine which form of deed would be the best for their particular situation.