Real estate conveyances are important transactions that can devastate someone economically if they go wrong. For this reason, the law recognizes two types of deeds (documents that convey the right of ownership over a particular land): special and general warranty deeds. Each deed contains certain promises or covenants to a grantee of land.
There are six covenants or agreements that a general warranty deed contains. The first covenant is one that guarantees the grantor has the land interest that he claims is being transmitted. The second covenant is one that guarantees that the grantor has the authority to convey the property to the grantee. The third covenant guarantees that the land being conveyed has no impediments such as mortgages, unpaid taxes, etc. The fourth covenant guarantees that no one else will disturb the grantee’s enjoyment of the land. The fifth covenant guarantees that the grantor will defend the grantee’s interest in the land against anyone else who may have a lawful claim to ownership over that land. And the sixth covenant guarantees that the grantor will do whatever is needed to make sure the grantee is given what the grantor purported to convey to him.
The general warranty covenants are not all breached or broken at the same time. Some are broken when the land is conveyed to the grantee. The first three covenants guaranteeing that the grantor has the interest in the land he is conveying, has authority to convey that interest and has no impediments, are all broken at the moment the land is conveyed. The remaining covenants are broken after the land is conveyed to the grantee. For example, the covenant guaranteeing no one else will disturb the grantee’s enjoyment of the land is broken when after the grantee obtains the land someone builds a factory next to that land and emits pollution over it, thus preventing the grantee from living on the new land.
If there are successive grantees, the states are divided as to the measure of compensation the last grantee can obtain. For example, suppose that M grants a general warranty to N. Then N grants another such warranty to O. O finds out that the land has a mortgage on it that was present when M granted the land to N. O wishes to sue for breach of the warranty. Which party can he sue and for what amount? In many states, O would be able to sue N and M and be able to obtain the compensation he paid N or the compensation that N obtained from M. In other states, O can only sue N and obtain the compensation he paid N.
Special Warranty Deed
A special warranty is different from a general warranty deed. A special warranty typically has only two covenants or agreements as opposed to six for the general warranty deed. Typically, these include the promises that the grantor has not conveyed the land or any interest in the land to anyone else and that the estate has no impediments made by the grantor.
There are two other deeds that are not special or general warranty deeds. They are called “estoppels by deed” and “quitclaim deeds." They typically deal with what happens if someone conveys land that he never has and then obtains that land after the conveyance.