A warranty deed is a deed that transfers ownership of real property—and guarantees certain characteristics of the title (ownership) being transferred. Under a warranty deed the seller guarantees or warrants that the title to the property (ownership) is good, clear, and free from encumbrances, liens, mortgages, and other claims. These guarantees of good and clear title are also known as covenants.
A warranty deed—also known as a general warranty deed or a full covenant and warranty deed—provides the greatest amount of protection to a purchaser of property and is often used when a buyer is trying to get financing for the purchase of a property.
Because a warranty deed places responsibility on the seller for ensuring title to the property is clear of liens, claims, and encumbrances, title insurance is often used to protect against the risk of claims and to facilitate the sale of the property.
When the parties to a sale transaction purchase title insurance the title company or the buyer’s attorney will perform a search of the public records regarding ownership of the property to make sure the purported seller of the property owns the property and that there are no other co-owners of the property, or liens, claims, or encumbrances on the property that might compete with or be made against the buyer after the sale transaction is completed.
In Texas, a warranty deed is a legal document used to transfer property ownership with a guarantee that the title is clear of any liens, claims, or encumbrances. This type of deed offers the highest level of protection for the buyer and is commonly used in transactions where the buyer is obtaining financing. The seller, by providing a warranty deed, is assuring the buyer of a good and clear title, which includes covenants that guarantee the seller has the right to sell the property, there are no undisclosed encumbrances, and the seller will defend the title against any claims. Title insurance is frequently purchased in conjunction with a warranty deed to safeguard against potential title issues that may not be discovered during a title search. In Texas, the title search and the issuance of title insurance are typically handled by a title company or the buyer's attorney to ensure that the seller has clear ownership and that there are no competing interests that could affect the buyer's title post-sale.
