Limited Warranty Deed Clause

Limited Warranty Deed Clause

A Limited Warranty Deed Clause is a provision within a limited warranty deed that outlines the extent of the grantor’s obligations and guarantees regarding the title of the property being conveyed.

A limited warranty deed itself is a type of property deed in which the grantor provides a limited warranty of title to the grantee. Unlike a general warranty deed, which offers the highest level of protection by guaranteeing that the grantor holds clear title to the property and will defend the title against all claims, a limited warranty deed typically only warrants the title against defects that occurred during the grantor’s ownership. This means the grantor is not liable for any claims or defects that existed prior to their ownership.

The Limited Warranty Deed Clause may specify that the grantor will defend the title against any claims made by third parties but may limit this responsibility only to the time period during which the grantor held the property. For example, if a buyer purchases property through a limited warranty deed and later discovers that there were liens on the property from before the grantor purchased it, the grantor may not be responsible for addressing those liens.

In practice, this type of deed is often used in real estate transactions involving commercial properties or where the seller is unable to provide a general warranty due to the nature of their ownership. It offers buyers a degree of protection while also limiting the seller’s liability, making it a common choice in many real estate deals.