A statutory warranty deed, or special warranty deed, is a document that transfers ownership of land. This type of deed contains specific promises from the person transferring the land, the grantor, to the person receiving the land, the grantee. The law refers to these promises as warranties or covenants. Legislative bodies have created a specific form that is used to serve as a statutory warranty deed.
To understand a statutory warranty deed, it is useful to compare it with two other types of deeds often used in the U.S. There's the quitclaim deed, a type of deed that does not provide any type of warranties to the grantee. A grantor that uses a quitclaim deed is only transferring whatever interest he may have in such property. Therefore, this type of deed does not provide any type of protection to a grantee from other people claiming an ownership interest in the land. It also does not protect against claims from encumbrances upon the land.
The second type of deed is a general warranty deed, or a warranty deed. This type of deed provides specific promises to a grantee. The usual warranties in this deed are that the grantee has title to the land, that there are no encumbrances on the land except as stated in the deed, and that no other party will make a claim of ownership to such property. This type of deed provides the greatest amount of protection to a grantee. It obligates the grantor to defend the grantee from any claims made on the land and entitles the grantee to recover any losses from the grantor.
A statutory warranty deed, also called a special warranty deed, also provides specific promises to a grantee. These promises are limited in comparison to promises contained in a general warranty deed. A special warranty deed only protects the grantee against lawful claims arising under the grantor. This means the grantor is not responsible for any claims made by people having claims from prior owners of the property.
To illustrate, a grantor transfers property to a grantee using a statutory warranty deed but fails to specify in the deed that there is a mortgage on the land. The grantor is liable to the grantee. The grantor, however, is not liable to the grantee if a third party makes a claim to the property as long as the grantor did not do anything to cause such a claim. If the grantor used a general warranty deed, he would be liable to the grantee for any claims. A general warranty deed generally protects a grantee against claims from all people while a special warranty deed protects against claims that arise only from actions of the grantor.
Certain jurisdictions in the U.S. have established that the use of certain terms in a deed will cause it to become a general warranty deed. For example, the words “convey” and “warrant” will cause the deed to operate as a general warranty deed. In other jurisdictions, however, the use of the terms “grant” or “warrant specially” will cause the deed to function as a statutory warranty deed.