If you are someone who has ever bought a property, you must have heard from your lawyer about a ‘general warranty.’ It is formed through a deed and helps the buyer avoid any encumbrances arising on the property in future.
A general warranty is created when a deed is transferred by the owner of the property (also referred to as grantor) to the buyer, (also referred to as grantee) while purchasing a real estate property. It provides its buyer with the highest form of protection. It ensures that on the closing, the buyer shall become the rightful owner of the property.
With a general warranty deed put in place, the grantor becomes responsible for any breach that occurs even in the future. It doesn’t matter if the breach occurred in their knowledge or at a time when the grantor was not the owner of the property, they would still be liable for the damages to the grantee.
Having a General Warranty means any disputes arising in relation to the property shall and must be settled by the grantor. Like any other deed, it must contain, the date when the transaction is taking place, names and addresses of the parties involved, a description of the relevant property and the signature of the parties involved. The deed must be signed in the presence of a witness and/or notary to be deemed valid.
A general warranty deed covers several covenants that help the grantee protect its legal rights to the property. Some of the important ones are:
● Through the deed the grantor warrants that he is the legal owner of the property and has the right to sell or transfer the ownership to anyone they deem fit.
● It warrants that the grantor has mentioned all the encumbrances or claims on the property to the buyer if any.
● In case the grantor claims that there are no encumbrances or liens on the property, and no outstanding claims from any creditor whatsoever, it must be expressly mentioned in the deed.
● The grantor shall take every step possible to make good the grantee’s title to the property in the present and the future.
One must keep in mind that a general warranty deed is not a contract of sale or proof of transfer of the funds. It is just a legal document supporting the completion of the sale and transfer of property.
