We are often asked the difference between the three most common types of deeds in Colorado: warranty deed, special warranty deed, and quitclaim deed. This post describes the three types of deeds and tells you what you should be looking out for as a buyer or seller of real estate. A deed is a legal instrument which conveys ownership of a piece of land from one owner to another. In order to be effective, a deed must identify the seller and buyer, must accurately describe the property, and must be signed and delivered by the seller. All deeds must contain these things in order to be effective, and therefore all the different types deeds look roughly the same from a distance.
However, the protection offered by a deed can vary significantly based on the type of deed you receive. The best way to think of the differences is what type of protection the seller is offering to the buyer against any defects in the title to the property. When we use the word “defect,” we mean anything that might impact the use or enjoyment or value of the property, such as an easement which exists but is not recorded, a squatter or tenant with an undisclosed lease , or perhaps worst of all, another person has a conflicting ownership claim to the property through a previous unrecorded deed or inheritance.
Warranty Deed: A warranty deed means that the seller of the property is promising to protect you (as the buyer) against any adverse claims on the property from the beginning of time. In other words, if someone shows up after you purchase the property and says that they have a rightful claim to the property because it should have passed to their grandparents under their great uncle’s will, the seller of the property must pay to defend against this claim even if they knew nothing about it.
Special Warranty Deed: A special warranty deed means that the seller of the property is promising to protect you against any adverse claims against the property in the time they owned it. In other words, they must defend any adverse claim from anyone claiming a right in the property that came from them (such as a previous deed to another buyer or a squatter who gained adverse possession rights during their ownership) but they have no obligation to defend against defects in the property from before their time.
Quitclaim Deed: A quitclaim deed is the least protective type of deed. It simply means that the seller is promising you: “you get whatever interest I have in the property.” There are no promises or warranties that go along with a quitclaim deed. If the seller owns the property free and clear, then you get the same rights and benefits. However, if there are any defects on the title to the property, you take these as-is and it is your responsibility to deal with them.
Obviously, it is in the seller’s best interest to offer as little warranties
