Why would a buyer of property accept a special warranty deed?
A special warranty deed means that the seller is responsible only for problems that he or she caused, and not for anything that occurred before the seller became the owner. This type of deed should not be a buyer's first choice and, if the buyer has bank financing, it may not be accepted by the lender. For example, if the seller had previously deeded the property to another party, had granted an undisclosed option to purchase, or had permitted a lien to be placed on the property, the seller could be in breach of the warranty of title. However, if the title is impaired because someone else forged a prior owner's signature, or sold the property in violation of a court order, the seller would not be liable because the seller did not personally cause the problem. If consenting to a special warranty deed is the only way a buyer can acquire the property, and a title insurance company agrees to fully insure the title, the buyer may purchase the property with a certain degree of comfort. Nevertheless, accepting a special warranty deed should be a choice of last resort.
Joan A. Koffman, Esq., Real Estate Attorney, Koffman & Dreyer, Newton, MA