What are the types of deeds recognized in Colorado and their uses? Part 1 of 2
GENERAL WARRANTY DEED
In a General Warranty Deed, the Seller (Grantor) guarantees title against defects that existed before the Grantor acquired title or that arose during the Grantor’s ownership. It does not contain any warranty against encumbrances or defects arising from the Buyer’s (Grantee’s) own acts. It is typically considered to be the “strongest” form of Deed, based on the expansive warranties that a Grantor makes to a Grantee in conveying title to a property.
SPECIAL WARRANTY DEED
In a Special Warranty Deed, the Grantor says, is in effect, to the Grantee, “I only guarantee that I have done nothing to create a title issue or an encumbrance while I have owned the property; that I have lawful authority to sign and deliver this Deed; and that the title which this Deed conveys is good and clear insofar as my actions are concerned.”
Under the new Colorado Contract to Buy and Sell Real Estate for Residential Property, effective January, 2019, that document automatically defaults to the use of a Special Warranty Deed, unless the parties decide and agree on an alternative form of Deed.
In a Quitclaim Deed, there are no warranties or representations, including any implication that the Grantor actually owns or holds title to the property. In such a Deed, the Grantor simply says to the Grantee, “I surrender to you and Quitclaim and abandon all claims and interests, if any, which I may have in the land.” Quitclaim Deeds will not pass after-acquired title (title acquired by a Grantor who conveyed land before he or she owned it). Quitclaim Deeds are often used in intra-family transfers, to add or remove someone from title, or to convey a property from individual ownership to a newly created trust or entity. Often, people obtain Quitclaim Deed forms and attempt to fill them out on their own. It is preferable, however, to have help from an experienced real estate practitioner, to avoid unintended consequences, such as unwittingly defeating joint tenancy ownership, when filling out such a Deed.
BARGAIN AND SALE DEED
This Deed contains no warranties at all, and, in effect, the Grantor says to the Grantee, “I bargain, sell, transfer and convey to you the real estate described in this deed. I make no representations or warranties with respect to title or anything else.” Note: Bargain and Sale Deeds are not accepted by many title companies because there is no warranty language involved.
In my next article, Part 2, I will cover additional types of Deeds, including a Personal Representative’s Deed, Conservator’s Deed, Trustee’s Deed, Beneficiary Deed and a Sheriff’s Deed, as well as their uses.
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