General or Special: What's the difference between these deeds?

Photo Credit: Nick Morrison

You might be wondering what the difference between the two commonly used warranty deeds are in Colorado. Let’s first start with the basics and outline the function of warranty deeds and how they impact the transfer of property ownership. 

The Brass Tacks:

A warranty deed is an instrument used to transfer ownership from the grantor (Seller) to the grantee (Buyer). Colorado recognizes two warranty deeds; a general warranty deed and a special warranty deed.

Similarities:

Both general warranty deeds and special warranty deeds share some common features. They both serve to formally transfer the ownership of a property from the grantor to the grantee, and they both include covenants and warranties that provide some level of title assurance to the buyer. Additionally, both types of deeds must be executed and recorded in accordance with Colorado's real estate laws and regulations to be considered valid and enforceable.

General Warranty Deed:

A general warranty deed is the most comprehensive and widely used type of deed in Colorado. With a general warranty deed, the grantor (the seller) provides the grantee (the buyer) with the strongest possible guarantee of title. The grantor is essentially warranting that they hold clear and marketable title to the property, and they are promising to defend the title against any claims or encumbrances that may arise in the future, even those that occurred prior to the grantor's ownership.

This means that the buyer, as the grantee, is afforded the highest level of protection and assurance that they are acquiring the property free and clear of any title defects or issues. The grantor is taking on the responsibility to resolve any potential title problems that may surface, providing the buyer with peace of mind.

Special Warranty Deed:

In contrast, a special warranty deed offers a more limited scope of title guarantees. With this type of deed, the grantor only warrants and covenants against title defects or encumbrances that may have arisen during their ownership of the property. The grantor is not responsible for addressing any title issues that existed prior to their acquisition of the property.

While a special warranty deed still provides some level of title assurance, it does not offer the same comprehensive protection as a general warranty deed. The buyer, as the grantee, assumes a greater degree of risk and responsibility for investigating and addressing any potential title problems that may have occurred before the current owner's time.

In conclusion, while general warranty deeds and special warranty deeds differ in the scope of title guarantees they provide, they both play a crucial role in the transfer of homeownership in Colorado. As a real estate professional, I recommend thoroughly understanding the implications of each type of deed to make an informed decision that best aligns with your specific needs and risk tolerance.