How To Craft a Limited Warranty Deed?

Updated October 16, 2023
11 min read
How To Craft a Limited Warranty Deed?


Buying a home or property can sometimes feel like you're navigating through a maze of legal jargon and dense paperwork. One document you're sure to encounter within this labyrinth is the limited warranty deed.

So, what is this deed, and why is it so critical in the real estate transaction process? This guide will demystify the ins and outs of a limited warranty deed, helping you understand when to use it, its legal facets, and how you can create one.

What Is a Limited Warranty Deed?

A limited or warranty deed, also frequently referred to as a "special warranty deed," is a legal document in real estate transactions that promises the buyer that the seller, or grantor, owns the property and holds the right to transfer it. The word "limited" is pivotal as it signifies that the guarantee only covers the period the seller owned the dispossession. This limited guarantee contrasts with a general warranty deed, which offers broader protection, as we'll detail later.

When To Use a Limited Warranty Deed?

Determining when to deploy a limited warranty deed requires a keen understanding of the situation at hand. A limited warranty deed isn't a one-size-fits-all solution, but it undoubtedly shines in several scenarios.

  • 'As-is' sales: This type of sale often brings along a limited warranty deed. When a property is sold 'as is', the seller typically isn't aware of or takes responsibility for, any defects. They merely ensure they haven't personally encroached on the title rights. The limited warranty deed, in this case, is the bridge that connects the deal, offering the buyer some protection while not overburdening the seller.

  • Real estate auctions: Limited warranty deeds are a common sight here. Unlike a private sale, auctions rarely offer the chance for inspections or in-depth investigations. Both parties understand the risk, hence the use of a limited warranty deed. It ensures the auctioning party didn't tamper with the title during its possession but does not offer assurance for the periods before.

  • Foreclosure sales: Properties sold via foreclosure usually come bundled with a limited warranty deed. Given the often-tumultuous history of such assets, a full warranty is rarely feasible, making the limited version a better fit.

  • Property investors: Savvy property investors often deal with limited warranty deeds. They comprehend the attached risks and are generally willing to tackle them for potential rewards.

  • Quick close transactions: When time is of the essence, a limited warranty deed speeds things along by reducing the due diligence required. It's a balance between risk and the need for a fast close.

A limited warranty deed doesn't offer comprehensive protection. It may, however, be the perfect fit in certain situations where limited buyer protection suffices. If comprehensive indemnification isn't a priority or is practically challenging, a limited warranty deed rides to the rescue.

General Warranty Deed vs. Limited Warranty Deed

Real estate transactions typically involve a constellation of documents, each playing its unique part. A critical pair is the warranty deed duo — the general warranty deed and the limited warranty deed. But what distinguishes one from the other?

General warranty deed:
  • Universal coverage: The general warranty deed covers all periods in the property's history. It's not only about the seller's terms but also about previous owners.
  • Broad protection: The seller assures no encumbrances exist — liens, easements, or ownership contests — during the property's entire history. If an issue does arise, the seller is obligated to handle it.
  • Assurance of quiet enjoyment: The buyer has the certainty and peace of mind of quiet enjoyment, meaning no third-party claimants will pop up unexpectedly to cast a shadow over their property ownership.
Limited warranty deed:
  • Limited time frame: The special limited warranty deed only covers the period during which the current seller owned the property. It doesn't extend to previous owners.
  • Narrow protection: It guards the buyer against title defects only if the seller is personally liable for them.
  • Less comprehensive: A special limited warranty deed offers less comprehensive protection, making it suitable for transactions where complete assurance isn't obtainable.

Find more about the general warranty deed using valuable real estate form templates. Also, you can explore the ins and outs of a limited warranty deed in detail at Lawrina, a reliable legaltech ecosystem.

Now, you are equipped to distinguish between a general and a limited warranty deed. Remember, the choice boils down to the degree of protection required and the transaction's context. Each document carries its unique benefits and suitability. 

How To Create a Limited Warranty Deed

When it comes to crafting a limited warranty deed, accurate information, and specific legal wording are paramount. Although each state may have unique requirements, certain elements are universally necessary. These comprise the complete legal names of the buyer (grantee) and the seller (grantor), a comprehensive description of the property, including exact boundaries, the date of the transaction, and the county where the deed will be filed.

The grantor should sign the limited warranty deed, often in the presence of a notary. Once signed and notarized, the buyer typically files the document with the local county recorder’s office. Initiating this process can be simplified by embarking with a legitimate real estate form template, such as a quit claim deed form template

Components of a limited warranty deed

Creating a limited warranty deed involves more than filling in a form; it's the construction of a legal document with significant implications. Here are the essential components that should be included in a warranty deed:

  1. Grantee's (buyer's) and grantor's (seller's) legal names.

  2. Clear property description outlining its boundaries.

  3. Date of the transaction.

  4. Local stories that the deed will be filed.

  5. Signature of the grantor.

As a reminder, each jurisdiction might have its specific stipulations. Therefore, for accurate crafting of a special limited warranty deed, consider seeking professional legal assistance to ensure adherence to all pertinent rules and regulations.


So, there you have it — the essentials of a limited warranty deed distilled. As a legal tool providing a limited guarantee, it suits those unique circumstances where complete assurance isn't mandatory or can't be provided. When you don't need an ironclad assurance shield or when providing such a shield isn't plausible for the seller, a special warranty deed steps up to the plate. It sits comfortably in the middle of the guarantee spectrum, between the no-guarantee provided by a quit claim deed and the full guarantee offered by a general warranty deed.

In conclusion, understanding the limited warranty deed and mastering its crafting process is vital in shaping a streamlined real estate transaction. It ensures that all parties are on the same page and that the necessary legal protections are in place. More importantly, a well-drafted warranty deed will grant you peace of mind, certainty, and a safety net in an otherwise complex transaction. So, when your next real estate deal comes around, remember the benefits that a warranty deed can provide.

Frequently Asked Questions

Are there any risks involved with a limited warranty deed?

While a limited warranty deed does offer certain protections, it is not without risks. The most significant risk is that it only guarantees against title defects and claims that occurred during the period of the seller's ownership. Hence, any flaws or encroachments that became part of the title prior to the seller's acquisition of the property are not covered.


This means that as a buyer, you could potentially encounter issues stemming from the property's past that the seller is not legally obligated to deal with. That's why it's critical to undertake thorough due diligence before purchasing property with a limited warranty deed. Engaging title services and conducting a thorough title search can help reduce these risks.


What happens if a problem arises from the period covered by a limited warranty deed?

If a title problem arises, that can be traced back to the seller's period of ownership — the timeframe covered under a limited warranty deed — the seller is legally bound to address the issue. This could involve resolving the problem directly or providing financial compensation to the buyer for costs incurred in resolving the issue.


However, remember that actions secured by a limited warranty deed do not apply to problems that occurred before the seller's ownership or after the property has been sold. This crucial limitation is a central feature of the limited warranty deed. Therefore, understanding this legal document's nuances is important to ensure the protection of your interests.


Can a limited warranty deed be transferred or sold?

Yes, a limited warranty deed can be transferred or sold. The buyer in such a transaction steps into the shoes of the original buyer and enjoys the same guarantees — and faces the same limitations — stipulated in the limited warranty deed.


However, keep in mind that the original seller's warranty only covers issues that arose during their ownership of the property. Any problems that appeared during the subsequent owner's term will not fall under the purview of the original limited warranty deed. 


The limited warranty deed only protects the rights the seller acquired and preserved during their ownership period. In contrast, a general warranty deed covers the property's entire history, offering more comprehensive protection.