What Type of Deed is Best for your Transaction?

Posted by on Nov 16, 2012 in Memos | Comments Off on What Type of Deed is Best for your Transaction?

Buyers and Sellers often overlook the importance of the type of deed used in their transaction which can have significant consequences for both parties.

 

There are three types of deeds found under the Washington conveyance statute.  They are the Statutory Warranty Deed (RCW 64.04.030), the Bargain and Sale Deed (RCW 64.04.040) and the Quit Claim Deed (RCW 64.04.050).  The differences amongst these three types of deeds may be described as follows:

 

1.         Statutory Warranty Deed (RCW 64.04.030).  The Statutory Warranty Deed conveys all of the Grantor’s right, title and interest in the described property.  It also creates, as of the date of delivery, the following statutory warranties in favor of the Grantee:

 

a.  That the Grantor owns an indefeasible estate in fee simple in the land described;

b.  That the Grantor has good right and full power to convey the estate;

c.  That the estate is free from all encumbrances;

d.  That the Grantee is entitled to quiet and peaceful possession of the premises, and;

e.  That the Grantor will defend the title against all persons who may lawfully claim the same.

 

If there are any encumbrances against the title, they must be called out as special exceptions from the warranties contained in the deed, otherwise, the Grantor would be absolutely liable for the breach of warranty.  On many occasions, the seller’s attorney will refuse to give a Statutory Warranty Deed, especially when the property has not been surveyed, as the Grantor may not know if there are encumbrances that arise out of possession, such as claims against title based on encroachments, adverse possession, prescriptive easements or zoning violations.

 

2.         Bargain and Sale Deed (RCW 64.04.040).  A Bargain and Sale Deed, also known as a Special Warranty Deed or Limited Warranty Deed, conveys all the Grantor’s right, title and interest in the described property.  It also creates, as of the date of delivery, only the following statutory warranties in favor of the Grantee:

 

a.  That the Grantor owns an indefeasible fee simple estate in the land described;

b.  That there are no encumbrances arising by or through Grantor, and that the Grantee will enjoy quiet and peaceful possession against the Grantor and Grantor’s heirs and assignees.

 

A Bargain and Sale Deed differs from a Statutory Warranty Deed in that the Grantor limits the scope of warranty so that the warranty only include encumbrances created, permitted or suffered by the Grantor, and not those of prior owners.  The Bargain and Sale Deed is typically given by an estate, trustee in bankruptcy or a lender who has acquired title through foreclosure.   The NWMLS standard form 21 used in virtually all purchase and sales involving properties listed with the NWMLS provides in section d. that title will be transferred by a Statutory Warranty Deed, yet, in those cases where the Grantor was not in possession of the property, such as an estate, trustee in bankruptcy or lender who has acquired title through foreclosure, the Statutory Warranty Deed would not be recommended.

 

3.         Quit Claim Deed (RCW 64.04.050).  The Quit Claim Deed conveys, without warranty, all of Grantor’s right, title and interest in the described property.  In short, it conveys whatever interest the Grantor held, which could be no interest at all.

The following articles are published for informational purposes and not for the purposes of providing legal advice. Please contact Galvin Realty Law Group at 425.248.2163 for a consultation about your specific needs and circumstances.