Utah Real Estate Code 57-1-12 Form Of Warranty Deed — Effect.
(1) Conveyances of land may be substantially in the following form: WARRANTY DEED ____ (here insert name), grantor, of ____ (insert place of residence), hereby conveys and warrants to ____ (insert name), grantee, of ____ (insert place of residence), for the sum of ____ dollars, the following described tract ____ of land in ____ County, Utah, to wit: (here describe the premises). Witness the hand of said grantor this __________(month\day\year). (2) A warranty deed when executed as required by law shall have the effect of a conveyance in fee simple to the grantee, the grantee’s heirs, and assigns: (a) of the premises named in the warranty deed; (b) of all the appurtenances, rights, and privileges belonging to the premises named in the warranty deed; and (c) with covenants from the grantor, the grantor’s heirs, and personal representatives, that: (i) the grantor lawfully owns fee simple title to and has the right to immediate possession of the premises; (ii) the grantor has good right to convey the premises; (iii) the grantor guarantees the grantee, the grantee’s heirs, and assigns in the quiet possession of the premises; (iv) the premises are free from all encumbrances; and (v) the grantor, the grantor’s heirs, and personal representatives will forever warrant and defend the title of the premises in the grantee, the grantee’s heirs, and assigns against all lawful claims whatsoever. (3) Any exception to the covenants described in Subsection (2)(c) may be briefly inserted in the warranty deed following the description of the land.
Warranty Deed
A warranty deed (sometimes called a general warranty deed) is a form of deed that provides a full guarantee of title to real estate. This guarantee covers acts taken by all previous owners in the chain of title. A warranty deed requires special language to ensure that the deed meets state requirements. This language is automatically included in all of our warranty deed forms.
How a Warranty Deed Works
A warranty deed transfers property from the current property owner (grantor) to one or more new owners (grantees). By signing the warranty deed, the grantor guarantees the grantee against all title issues, regardless of when they arose. This guarantee is not limited to the time when the grantor owned the property. Even if the title issue was caused by someone who owned the property before the grantor, the grantor is legally responsible.
Other Names for General Warranty Deeds
A warranty deed is sometimes called a general warranty deed. Using the word “general” distinguishes a general warranty deed from other deeds that provide a limited warranty, like special warranty deeds, statutory warranty deeds, or limited warranty deeds. As a practical rule, though, the terms warranty deed and general warranty deeds are interchangeable.
Relationship of General Warranty Deed Form to Warranty of Title
The name warranty deed identifies the deed as one that conveys a full warranty of title. In most states, this full warranty of title includes these six guarantees, known as covenants of title:
• That the grantor has the legal right to convey the property and has not agreed to transfer it to anyone else (covenant of right to convey);
• That the grantor owns or has a legal interest in the property (covenant of seisen);
• There are no encumbrances that than those that have been disclosed (covenant against encumbrances);
• That the grantee and anyone who buys or inherits the property from the grantee will be able to enjoy the property without being interrupted by someone else that claims to have superior title and that they will not be forcibly removed from the property or lose possession of it (covenant of quiet enjoyment);
• That the grantor will protect the grantee if someone else claims to have superior title to the property (covenant of warranty); and
• That the grantor will take whatever actions are necessary to fix any problems with the grantee’s title to the property (covenant of further assurances).
Most states recognize all six covenants, but in some states—like Ohio—warranty deed does not include the covenant of further assurances. The grantor is responsible for any breach of these covenants, even if the breach was caused by something that happened without the grantor’s knowledge and before the grantor owned the property. Warranty deeds place the risk on the grantor. The grantor could be responsible for unknown title issues caused by someone else. To mitigate against this risk, title insurance is used in most transactions involving warranty deeds. Purchasing title insurance shifts risk to the title insurance company instead of the grantor. It also helps ensure that a full title search is performed and that all foreseeable title issues are addressed and resolved before the deed is signed.
Comparison of Warranty Deeds to Other Forms of Deeds
The warranty of title is about risk allocation. A warranty deed allocates all risks to the grantor. The grantor is responsible for all title issues regardless of when they arose. Other forms of deeds provide less risk to the grantor. These deeds include:
• Special warranty deeds—also known as grant deeds, covenant deeds, statutory warranty deeds, or limited warranty deeds—which limit the warranty to the period when the grantor owned the property; and
• Quitclaim deeds—also known as quit claim deeds—which provide no warranty of title.
The name warranty deed deals with the warranty of title. Some deeds are named after features other than the warranty of title. Life estate deeds, lady bird deeds, and transfer-on-death deeds are all named after estate planning and probate avoidance features. Because these names relate to different features, two names may apply to a single deed. For example, a single deed may be both a quitclaim deed and a lady bird deed.
Common Uses of General Warranty Deeds
Because of the risk that warranty deeds allocate to the grantor, they are usually used in the sale context when the buyer or seller will purchase title insurance on the property. The purchase of title insurance protects the buyer while lessening risk on the seller. Warranty deeds are rarely used outside of the sale context. If a grantor is giving property away, the grantor is usually not comfortable providing a full warranty of title that would make the grantor liable for unknown title issues. This is especially the case if the parties will not purchase title insurance as part of the transfer.
How to Create a General Warranty Deed
Each state’s laws apply to warranty deeds used in that state. In some states, the warranty provided by a warranty deed is rooted in common law. The actual form of the warranty deed is derived from the common law and from customary real estate practice in that state. In other states, a specific statute authorizes the use of warranty deeds. In these states, the statute will usually contain specific language that must be included in the vesting paragraph. The warranty is only part of the deed. The deed must also contain other customary elements, including:
• An accurate legal description of the property (usually the same one used in the prior deed);
• A recitation of consideration paid as part of the transfer, if any;
• If more than one grantee will own the property, a description of the way that the grantees will hold the title;
• The font size and page format required to meet the state’s recording laws; and
• Signature and notary requirements that track the statutory form for validity.
The warranty deed should be created with each requirement in mind and use precise language. Imprecise language can seem harmless to a layperson but may have legal consequences. In some cases, using the wrong warranty language can even result in criminal liability. Each deed prepared by our deed preparation service was designed by attorneys with each legal requirement in mind and uses the right language for the warranty of title.
How to Get A Warranty Deed And Transfer Property Rights
A warranty deed is a legal document that people use to transfer property. A warranty deed states that a property owner has sole claim to the property – in other words, that no other entity has a lien on the piece of land or home. In a warranty deed, one will include a legal description of the property, the name of the person transferring the property (grantor), the name of the person taking ownership (grantee), and details of the ownership transfer. It is necessary to use a warranty deed to secure the grantee’s legal ownership and claim to the property.
Warranty Deed vs. Quitclaim Deed
Warranty deeds and quitclaim deeds are often used in conjunction with one another. Yet these two deeds are very different.
A quitclaim deed, or a non-warranty deed, offers much less legal protection than a warranty deed. Two or more parties who are in a personal or professional relationship tend to use quitclaim deeds, often when the property isn’t sold. A quitclaim gives the new owner no legal recourse against the grantor if the property has an issue. You would not want to use a quitclaim deed to transfer property to a stranger or if there is any chance of legal matters down the road.
A warranty deed gives the property purchaser much more protection. With a warranty deed, the person purchasing the property has legal protection from any prior liens, claims, or demands against the property that occurred in the past. The new owner has full rights to the property, and can sell it if desired. Receiving a warranty deed guarantees that there are no liens or encumbrances on the property. The new owner will receive proof of all previous titles. Warranty deeds are most appropriate during traditional property sales, whereas quitclaim deeds are used most often among family members, beneficiaries, and heirs.
Types of Warranty Deeds
Within the two main types of deeds, warranty and quitclaim, there are other categories. A general warranty deed provides maximum protection to the grantee. It is a document that states the grantor is the rightful owner, he/she has the right to transfer the property, the land has no outstanding claims from lenders, and someone with a better claim to the title can’t take the property. Traditional warranty deeds come with title insurance policies to protect the grantee from ownership disputes.
Aside from a general warranty deed, there are:
• Special warranty deed. This type of deed does not guarantee that the owner will enjoy the property claim-free for life. Instead, it ensures that the property is currently claim-free for the amount of time that the current owner has had the title. If claims crop up in the future, the grantee does not have the right to pursue claims against the grantor for compensation or legal solutions.
• Grant deed. A grant deed is similar to the general warranty deed. Depending on the jurisdiction, a landowner may use a grant deed instead of a warranty for basically the same protections. Grant deeds transfer property from the grantor to the grantee with warranties that no one else has a claim to the land, and that there are no liens or restrictions. The only protection it doesn’t have, compared to the general deed, is safety against third-party claims.
• Bargain and sale deed. This deed does not offer any warranties against encumbrances on the property. It merely implies that the grantor has the title to the property, not that the title is free from defects. If ownership and claim problems occur down the road, the grantee could be in trouble with a bargain and sale deed. Foreclosure actions frequently use this type of deed.
Understanding a Property’s Title
The title to a property isn’t actually a document. The title is essentially a report of the chronological history of ownership of the property. Each time a deed is used to transfer ownership, the transaction becomes a part of the chain of title. Additionally, mortgages loans and miscellaneous liens filed against the property are included on a title report. Title searchers use the recorded documents found in the county system to compile the report. The most current deed transaction determines identifies the legal owners of the property. Owners are considered to hold a “free and clear” title when no outstanding mortgage loans or other liens exist against the property.
Errors in the Title
When a mortgage loan is used to purchase a home, the lender requires the borrowers to buy a title insurance policy. The policy protects against errors in the title report or issue that was overlooked, such as a lien filed improperly or unrecorded deed. Title insurance only benefits the lender. It’s sometimes customary for the seller to offer to pay the premium depending on where the property is located or the specific terms of the sales contract. Owner’s policies are also available at an additional cost.
Special Consideration: Special Warranty and Quitclaims Deeds
A special warranty deed is not nearly as comprehensive as its general counterpart, as it only conveys two warranties:
• The grantor warrants that he or she has received the title.
• The grantor warrants that the property was not encumbered during the time the grantor owned the property.
A special warranty deed does not protect against any claims prior to the grantor receiving the title. Special warranty deeds are typically used more in the commercial real estate world. As with most deeds, the warranty deed should contain an accurate legal description of the property being conveyed, be signed and witnessed in accordance to state law where the property is located and delivered to the grantee during the closing of the transaction. Like the warranty deed, the quitclaim deed transfers property from one individual to another. Title insurance is not needed for this type of deed. And unlike the warranty deed, a quitclaim deed is drawn up when a property is transferred without a sale. So it may be used, for instance, when a property is transferred between family members.
Quitclaim deeds offer less protection than a warranty deed. They release the owner or grantor’s interest in the property and don’t state whether he or she had valid ownership in the first place. Instead, the assumption is that if the grantor ever did own it, he or she relinquishes any claim to the property when the deed is signed. This type of deed also prevents the owner from any future interests in the property.
That being said, the buyer agrees to all conditions and takes on the risk that there may be other claimants to the property.
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The post Utah Real Estate Code 57-1-12 first appeared on Michael Anderson.
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