276: Listen and Learn -- General, Special, and Quitclaim Deeds (Property)

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Today we will be discussing general, special, and quitclaim deeds. Whether you are currently in law school or preparing for the bar exam, this is likely going to be a heavily tested topic. On the essay portion of the Uniform Bar Exam, warranties found in deeds are tested approximately 11% of the time. So, where do these types of deeds fall within the world of property? There are a lot of different stages in the transfer of land.

There is a land sale contract, there is the deed itself, there is delivery of the deed, and then there is what happens post-delivery of the deed. General, special, and quitclaim deeds come into play after the deed is delivered. As you can probably guess, there are risks associated with purchasing real property, and that is what these warranties are all about.

When you are purchasing real property, you are essentially purchasing a piece of paper called the "title" that says you have possession of the property. Well, what if you spent a million dollars on that piece of paper, but it turns out there are defects, like the seller never even owned the property to begin with? These warranties provide varying levels of protections to the grantee in the event there is a defect after the deed is delivered.

The grantor's liability to these defects depends on what type of deed the grantee has. There are three types: A general warranty deed provides the most protection, a special warranty deed provides some protection, and a quitclaim deed provides little to no protection. I'll walk through each of these one by one. First, a general warranty deed.

You'll know that the grantor conveyed a general warranty deed to the grantee if in the grant you see the words "general warranty deed", "warranty deed", or "a deed with the usual covenants". A general warranty deed protects the grantee through covenants, or promises that will hold the grantor liable in certain situations. A general warranty deed contains six covenants. Three of these covenants are present, and three are future. The difference can be a little tricky, so let's break it down.

Present covenant is one that is breached, if at all, upon conveyance. Present covenant also does not run with the land. That means that only the grantee and not a subsequent party can sue the grantor for breach of a present covenant. This makes sense, since these covenants can only be breached upon conveyance, that it would not protect a subsequent owner. Future covenant, on the other hand, can be breached at conveyance or at some future time.

Accordingly, these covenants run with the land, meaning that both the grantee and subsequent parties are protected. The three present covenants are: [1] covenant of seisin; [2] covenant of the right to convey; and [3] covenant against encumbrances. First, the covenant of seisin is a promise that the grantor owns and has good title of the estate she is transferring.

If the grantor breaches this covenant, the grantee will be awarded damages in the amount of the purchase price they paid for the property.

As a result, Sally would be awarded damages in the amount of $500,000. The second present covenant is the covenant of the right to convey. The covenant of the right to convey promises that the grantor has the legal right to convey the land described in the deed. If the grantor breaches this covenant, the grantee will be awarded the amount of the purchase price they paid for the property. This is very similar to the covenant of seisin.

The difference is that while the covenant of seisin promises the grantor owns the property purported to be conveyed, the covenant of the right to convey promises that the grantor has the legal right to transfer the property. The third present covenant is the covenant against encumbrances. This promises that the title is free of encumbrances. Encumbrances are anything that would diminish the value of the land, restrict its use, or place an obligation on the grantee.

This would be like a mortgage or an easement. The damages for breaching this covenant are either the cost to remove the encumbrance, or the reduction in the property's market value due to the encumbrance. The three future covenants are: [1] covenant of quiet enjoyment; [2] covenant of warranty of title; and [3] covenant of further assurances. These, again, are covenants that can be breached at some future date, other than conveyance.

First, the covenant of quiet enjoyment promises that another party will not disturb the grantee's use or enjoyment of the land. This covenant would be breached if the grantee is evicted from the land, in part or in total, and actual or constructive. If this covenant is breached, the grantee will be awarded damages in the form of the total amount the grantee paid for the property.

Second, the covenant of warranty of title obligates the grantor to either defend title claims from third parties, or otherwise compensate the grantee for losses she might incur from third parties. This means that if a third party claims a superior title to the property, the grantor is required to protect and defend the grantee against that third party.

Third, the covenant of further assurances promises that the grantor will do whatever is reasonably necessary to help the grantee perfect their title. For example, if the deed is defective in any way, the covenant of further assurance requires the grantor to execute a new and corrected deed. As an example, this could mean paying off a mortgage or a lien, or filing necessary documents. That was a lot of information, so let's break it all down through a couple hypotheticals.

First, consider this: "Walter owns a 50-acre plot of land. In 2015, Walter deeded the property to Shelly through a warranty deed. Shelly has been living on the property since, with no issues. However, last week, Nell came forward and claimed ownership of the land. Does Walter have any obligations to Shelly against Nell?" What do you think? Let's break it down. First, we know that the deed in question is a general warranty deed, because the facts use the phrase "warranty deed" to describe it.

This means that Walter can be liable for all six covenants. Second, the only covenant implicated by the facts is the covenant of warranty of title. Because Nell is coming in and claiming she has ownership rights to the land, Walter is obligated to either defend Shelly's claim to the title, or compensate Shelly for any losses she incurs from Nell. What about the fact that this is happening years after Shelly has deeded the property? Does that make a difference? It doesn't.

If you remember, there are present covenants and future covenants found in a general warranty deed. The covenant of warranty of title is a future covenant, meaning it can be breached at some point in the future after conveyance. Walter, then, must comply with the covenant of warranty of title. Let's look at another one together. This one is adapted from the July 2016 California bar exam: "Al owned a farm.

In 1990, Al deeded an easement for a road along the north side of the farm to his neighbor, Ben. The easement decreased the fair market value from the farm by $5,000. In 2009, Al executed a written contract to sell the farm to Polly for $100,000. In 2013, Al deeded an easement for water lines along the south side of the farm to Water Co., the local municipal water company. Due to this easement, the owner of the farm cannot use the land immediately surrounding the water lines.

The easement increased the fair market value of the farm by $10,000. In 2014, after a long delay, Al finally executed and delivered to Polly a warranty deed for the farm. In 2015, Polly blocked Ben's use of the road and objected to Water Co.'s construction of the water lines. Polly now seeks damages from Al for breach of the warranty deed. What is the likely outcome of Polly's suit?" Let's break down these facts a little bit.

First, we know that the deed in question is a general warranty deed, because the facts use the phrase "warranty deed" to describe it. This means that Al can be liable for all six covenants. We also know that there are two easements on the land - a road granted to Ben and a waterline granted to Water Co. Next, let's think through those six covenants to determine which Polly thinks is breached.

There are no facts indicating that Polly received a lesser interest in the land than what Al purported, so the covenants of seisin and right to convey are not breached. Likewise, there is no one claiming superior title against Polly, so the covenant of quiet enjoyment and warranty of title are not breached. The covenant of further assurances is also not breached, because the deed is not defective. That leaves us with a covenant against encumbrances.

As a reminder, this is a present covenant, promising that the title is free of anything that would diminish the value of the land, restrict its use, or place an obligation on the land. The easement granted to Ben decreased the property value by $5,000. Because the easement decreased the property value, the easement is an encumbrance that violates this covenant. Similarly, the easement granted to Water Co. also violates the encumbrance.

Although this easement increased the value of the property by $10,000, it is still an encumbrance because it restricts the landowner's use of the land. Since, then, this is also an encumbrance, the covenant is violated with the easement granted to Water Co. as well. Since the covenant against encumbrances is a present covenant, the covenant was breached upon conveyance to Polly.

Al now either has to pay the cost to remove the encumbrance, or reduce the property's market value due to the encumbrances. With that, let's move on to the next type of deed. The second type of deed is a special warranty deed. This type of deed contains the exact same covenants as general warranty deeds. However, it only promises against defects that arose during the time the grantor had title.

This deed does not protect purchasers from title defects that occur before the immediate grantor took possession. As a result, it offers less protections to grantees than the general warranty deed would offer. Let's look at a hypothetical to understand this and how it differs from a general warranty deed: "Kim owned 75 acres of land. Kim validly conveyed a one-acre portion of her property to Darby. Two years later, Kim deeded the full plot of land to Austin as warranty deed.

The deed failed to mention that Darby owns one acre. Two years after that, Austin then deeded the land to Sandra as a warranty deed. Similarly, this deed also failed to mention that Darby owns one acre. Sandra now plans to build a pool on the one acre Darby owns. To stop Sandra from building a pool on her land, Darby erects a barbed wire fence around the property. Sandra has reached out to Austin, but Austin refuses to help. Analyze Sandra's potential claims against Austin."

First, because of the words "warranty deed" in the facts, Sandra has a general warranty deed. Here, Austin breached four of the six covenants - the present covenants of seisin and the right to convey, and the future covenants of quiet enjoyment and warranty of title. The covenant of seisin was breached because Austin did not own the one-acre plot that was previously deeded to Darby by Kim that he purported to convey to Sandra.

Similarly, the covenant of the right to convey was breached because Austin did not have the legal right to convey that one-acre plot to Sandra. Since these two covenants are present covenants, they were breached upon conveyance of the deed to Sandra. The covenant of quiet enjoyment was breached because when Austin deeded Sandra the 75 acres, he promised that no one would disturb her use of the land.

Now Darby erected a barbed wire fence on the land Sandra supposedly owns, effectively evicting her from that section. The covenant of warranty of title was also breached because under this, Austin has an obligation to defend Sandra against claims against the 75 acres. It does not matter that these were breached after the conveyance, because both of these are future covenants. Now let's change the facts a little bit.

All facts remain the same, except instead of Austin deeding Sandra a general warranty deed, Austin deeded Sandra a special warranty deed. Again, a special warranty deed contains the same six covenants as a general warranty deed, but only protects purchasers from title defects occurring during the immediate grantor's possession.

If Sandra was given a special warranty deed, Sandra would have no route of recovery against Austin, because the defect in title took place before Austin had possession of the property. The defect here is that Darby owns a one-acre piece of the 75-acre total. Darby was deeded this piece by Kim before Austin took ownership of the property.

Since the defect took place before Austin took ownership of the property, he would not be liable to Sandra for any breaches of the six covenants arising out of that defect. Hopefully you can see that although a special warranty deed provides protections for purchasers, those protections can be extremely limited in certain circumstances. Finally, let's move on to the last type of deed. The final type of deed is a quitclaim deed. A quitclaim deed promises no covenants of title.

This makes a quitclaim deed pretty simple. There are no promises - this means that a grantee cannot sue the grantor for any breaches of covenants, because the deed does not have any. In other words, the grantee takes the land as is. Let's look at this example: "Jordan deeded a 20-acre farm to Carl as a quitclaim deed for $250,000. Shortly after taking possession of the farm, Carl found out Jordan only owned three of the 20 acres he purported to transfer.

Can Carl Sue Jordan for breach of the quitclaim deed?" The answer is "no". Quitclaim deeds offer little to no protections for grantees, meaning here, Carl is completely out of luck. Carl takes the land as is, and only owns three acres instead of the full 20. Now, imagine this change to the facts: Everything is the same, except now let's add a previous owner before Jordan: "Jessica owned the full 20-acre plot of land. In 2010, Jessica deeded 17 acres to Sammy.

In 2012, Jessica then purported to transfer 20 acres to Jordan as a general warranty deed. In 2022, Jordan deeded the 20-acre plot of land to Carl as a quitclaim deed. The rest of the facts remain the same." What happens now? Do we come to a different outcome? The answer is "yes, we do". Quitclaim deeds are usually pretty straightforward - the grantee takes the property as is, and has no course of remedy.

The only time quitclaim deeds can get complicated is when the previous grantor transferred the property to the immediate grantor through a general warranty deed. In these situations, the grantee can sue the previous grantor, not the immediate grantor, for breaches of the six covenants. So, here Carl still has no remedy against Jordan, because Jordan deeded Carl a quitclaim deed. However, Carl does have a route of remedy against Jessica.

This is because Jessica deeded Jordan a general warranty deed. This means Carl can sue Jessica for breaches of the six covenants. It can be a little confusing, so just always look to the chain of title when dealing with a quitclaim deed to see if the grantee can sue a previous grantor. We are running out of time, so let's quickly recap what we've learned. A deed can take three forms - a general warranty deed, a special warranty deed, and a quitclaim deed.

A general warranty deed is one that offers the most protections to grantees. Present in a general warranty deed are six covenants, or promises from the grantor to the grantee. These six covenants are the covenant of seisin, the covenant of the right to convey, the covenant against encumbrances, the covenant of quiet enjoyment, the covenant of warranty of title, and the covenant of further assurances.

A special warranty deed offers some protections for the grantee, but not as many as a general warranty deed does. This type of deed contains the same six covenants, but only warrants against defects that arose during the time the grantor had title to the property, not any that arose before. Finally, a quitclaim deed offers very little to no protections for a grantee and is often referred to as an "as is" deed, because the grantee takes the property as is.

If the grantee takes via quitclaim deed, there are no covenants an immediate grantor can breach. The small complication to this is that if the immediate grantor took via a general warranty deed, the grantee can sue the previous grantor for breaches of the six covenants. Alright, that's a wrap for today. Glad you could join me as we discussed general, special, and quitclaim deeds.

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