What’s Your Deed?
By David Jacobs and Beau Brincefield*
Question: Paragraph 16 of the Regional Sales Contract requires the seller to convey the subject property “by General Warranty Deed with English with Covenants of Title”. What does that mean and how does such a deed differ from other types of deeds?
Answer: There are several different types of deeds that are used for different purposes. All deeds convey some form of title to real estate from a grantor to a grantee. The types of deeds that most REALTORS® see and work with most often are deeds of bargain and sale (which transfer title to real estate from a seller to a purchaser) and deeds of trust (which convey title to real estate from the owner of the real estate to a trustee who holds title in trust, usually for the benefit of the lender, to secure the repayment of some obligation by the owner of the property).
Whenever real estate is transferred by deed, it is important, for both the grantor and the grantee, to understand what their respective rights and responsibilities are with respect to the quality of title that is conveyed by the grantor. In other words, is the grantor conveying a “good and marketable title” and, if the title is challenged, who bears the cost of defense and, ultimately, the risk of any loss?
A properly drafted deed defines the respective rights and obligations of the grantor and grantee by specifying the type of warranty that the grantor gives the grantee. Basically, there are three mutually-exclusive possibilities: a General Warranty Deed, a Special Warranty Deed and a Quitclaim Deed.
General Warranty Deeds
A General Warranty Deed is a deed in which the grantor warrants generally the title to the property conveyed to the grantee. That General Warranty of Title is a promise and representation by the grantor that the grantor will defend the title which the grantor conveyed to the grantee against the claims and demands of all persons whomsoever, back to the beginning of time. If anyone else (other than the grantee) comes along claiming any interest in the title conveyed, the grantor is obligated to defend the title of the grantee against any and all such claimants.
Special Warranty Deeds
A Special Warranty Deed includes a promise and representation from the grantor to the grantee that the grantor will defend the grantee’s title against any person who claims any interest in the title by, through, or under the grantor. In other words, the grantor does not warrant the quality of the title back to the beginning of time but warrants only that nothing has occurred during the grantor’s time of ownership that would defeat or diminish the grantee’s rights in the property. Obviously, the Special Warranty is more limited than the General Warranty. If a grantor conveys property with a Special Warranty and a claim later arises as a result of some circumstance that existed before the grantor’s ownership, the grantor has no obligation to defend the grantee’s title against such a claim.
“English Covenants of Title”
When a deed includes the phrase “with English Covenants of Title” or words of similar import, the effect of those words is to incorporate by reference certain very specific promises and representations by the seller. These specific promises and representations are defined in the Virginia Code in Sections 55-70 through 55-74.
To some extent, the English covenants of title merely reiterate, or provide further definition of, the promises and representations already expressed in the deed in the General or Special Warranty (legal scholars love to debate questions like “if the grantor gives a General Warranty of Title, what additional representations or promises do the English Covenants of Title add to the General Warranty”? Fortunately, for the practical purposes of this article, we don’t have to deal with such issues).
For our purposes, incorporating the phrase “with English Covenants of Title” into a deed means that the grantor makes the following warranties and representations to the grantee with respect to the quality of title being passed by the grantor to the grantee:
- The grantor owns all of the rights and interests in the property in their totality without any limitation or condition whatsoever.
- The grantor has not done anything, or allowed anything to happen, that would create any encumbrance on the title to the property.
- The grantor has the absolute right and authority to convey the property to the grantee.
- The grantee shall be entitled to quiet possession of the property against the claims of all other claimants.
- The grantor shall, upon any reasonable request, execute, or cause to be executed, such further documents as may be reasonably required to confirm the conveyance to the grantee.
Simply stated, a Quitclaim Deed is a deed that contains no warranty or covenant of title whatsoever. The grantor merely conveys such title as the grantor has, if any, without making any warranty or representation as to what it is.
Obviously, it is best for a grantee to receive a General Warranty Deed that incorporates the English Covenants of Title rather than either a Special Warranty Deed or a Quitclaim Deed. In Virginia, this is the customary way in which residential resale property is conveyed. Paragraph 16 of the Regional Sales Contract reflects this custom. In some other states (like Maryland, for example), Special Warranty Deeds are the more common practice.
When trustees or builder/sellers transfer title to real estate in Virginia, they typically use Special Warranty Deeds in order to reduce their exposure to later title claims.
David Jacobs and James C. “Beau” Brincefield, Jr. [were] attorneys with the Alexandria law firm of Brincefield Hartnett Maloof & Paleos, P.C. they can be reached at www.brincefield.com.