When you buy or sell a home or other real estate, the warranty deed is the legal document to formally transfer ownership from the seller to the buyer. Deeds guarantee that the seller owns the property and has the right to sell it, which provides important protection for the buyer. Understanding the different deed types can help buyers and sellers navigate real estate transactions.
What is a Statutory Warranty Deed?
A statutory warranty deed in Florida can also be called a general warranty deed. These deeds offer the most protection and are the most common way to transfer property. A statutory warranty deed guarantees that the seller who owns the property will be responsible for any problems with the property and is allowed to sell the property. This means the property hasn’t already been sold and is not subject to any liens or mortgages that aren’t noted in the deed.
What is a Special Warranty Deed?
In addition to a statutory deed, Florida real estate buyers might also see a special warranty deed. A special warranty deed offers protections to the buyer, but they’re a bit narrower than those guaranteed by a statutory warranty deed. It only guarantees no problems with the property or debts against the property that happened while the seller owned it. It doesn’t make any promises about concerns that may have come up with a previous owner.
Major Differences Between the Two
The major distinction between a statutory vs. special warranty deed in Florida is the timeframe the deed covers. A statutory warranty deed covers the entire history of the property. This means the deed needs to include any debts or problems, even if they happened before the current owner bought the property. For example, if a previous owner’s creditors placed a lien on the house, this must be noted in a statutory warranty deed.
A special warranty deed only covers the period the current owner owns the property. It would not need to include a lien placed on a previous owner. Special warranty deeds make the transaction simpler for sellers who may not be aware of their property’s full history. Each type of warranty deed also tends to be used in transactions involving different property types.
Which One is Best for Me?
Generally, statutory warranty deeds are used for residential property sales, and special warranty deeds are used for commercial property sales. Therefore, you’ll probably decide whether to use a statutory vs. special warranty deed in Florida based on the type of property involved. Special warranty deeds are more popular for commercial property because these properties tend to change ownership more frequently than homes do. This seller usually hasn’t owned the property for very long, so they don’t want to make guarantees about what may have happened under previous owners.
The one scenario in which special warranty deeds are used for homes is foreclosure sales. The bank owns the property and has only been the owner for a short time. It doesn’t necessarily know what the previous owner did with the property. Statutory warranty deeds offer more protection for buyers because they cover a longer period, but special warranty deeds are the standard in some transactions.
For All Your Legal Needs, Reach Out to the Team at The Orlando Law Group
You don’t need to decide which type of warranty deed is right for your property. The Orlando Law Group team has the knowledge and experience to guide you. Contact us to schedule a consultation today!
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Last Updated on September 26, 2024 by The Orlando Law Group
