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Special Warranty Deeds in Texas: What Buyers and Sellers Need to Know

Texas buyer and seller reviewing a Special Warranty Deed during a real estate closing.

When buying or selling real estate in Texas, the type of deed used to transfer ownership can have important legal consequences. One of the most common deeds used in commercial transactions and certain residential transactions is the Special Warranty Deed.

Although its name sounds similar to a General Warranty Deed, the legal protections provided are significantly different.

Understanding what a Special Warranty Deed does—and what it does not do—can help buyers and sellers make informed decisions before closing.

Walter Law, PLLC assists buyers, sellers, investors, property owners, and businesses with deed preparation, title issues, real estate transactions, and other Texas real estate matters.

 

What Is a Special Warranty Deed?

A Special Warranty Deed is a legal document used to transfer ownership of Texas real property.

Like other deeds, it transfers ownership from the grantor (seller) to the grantee (buyer). However, unlike a General Warranty Deed, the warranties provided by the grantor are limited.

Generally, the grantor only warrants that title defects or ownership claims did not arise during the period in which the grantor owned the property.

The grantor does not generally provide warranties concerning events or title problems that existed before acquiring the property.

 

How Is a Special Warranty Deed Different From a General Warranty Deed?

The primary difference is the scope of the warranties.

A General Warranty Deed generally provides warranties covering the property's entire chain of title.

A Special Warranty Deed generally limits those warranties to matters occurring only while the grantor owned the property.

This distinction may become important if an ownership dispute or title defect is later discovered.

Because the legal protections differ, buyers should understand which deed is being used before completing a real estate transaction.

 

Why Are Special Warranty Deeds Common in Texas?

Special Warranty Deeds are frequently used because the seller may not want to assume responsibility for issues that occurred before acquiring the property.

Examples include:

  • Commercial real estate transactions

  • Investment property sales

  • Bank-owned property

  • Property held by business entities

  • Certain residential sales

  • Estate property transfers

The appropriate deed depends on the specific transaction and the agreement between the parties.

 

Common Situations Where a Special Warranty Deed Is Used

Although every transaction is different, a Special Warranty Deed is commonly used when:

  • A company sells investment property.

  • A trust transfers real estate.

  • Property is sold by an estate or fiduciary.

  • A lender sells foreclosed property.

  • A business entity transfers commercial property.

  • The seller is unwilling to provide warranties covering decades of prior ownership.

Each situation should be evaluated individually to determine whether a Special Warranty Deed is appropriate.

 

Does a Special Warranty Deed Mean There Are Title Problems?

No.

Receiving property by Special Warranty Deed does not necessarily mean the property has title defects.

Many perfectly marketable properties are transferred using Special Warranty Deeds.

However, because the seller's warranties are more limited, buyers often rely on other protections, including:

  • Title commitments

  • Owner's title insurance

  • Property surveys

  • Review of public records

  • Legal advice when appropriate

 

Is Title Insurance Still Important?

Yes.

Because a Special Warranty Deed does not provide the same broad warranties as a General Warranty Deed, title insurance may provide important protection against certain covered title defects.

Title insurance and the deed serve different purposes.

The deed transfers ownership and establishes warranties between the parties.

Title insurance provides coverage according to the terms, conditions, exclusions, and exceptions contained in the policy.

 

What Information Is Included in a Special Warranty Deed?

A properly prepared Special Warranty Deed generally includes:

  • The grantor's name

  • The grantee's name

  • The legal description of the property

  • The granting language

  • The limited warranty language

  • Reservations or exceptions

  • Consideration

  • Signature and acknowledgment requirements

Accurate legal descriptions are critical because mistakes can create title problems and future ownership disputes.

 

Can a Special Warranty Deed Be Corrected?

Sometimes.

If a deed contains an error involving the legal description, parties, or other information, additional documents may be required to correct the issue.

The appropriate solution depends on the type of mistake and the circumstances of the transaction.

Correcting a deed promptly may help prevent future title complications.

 

Does a Special Warranty Deed Affect Future Buyers?

Potentially.

Future buyers, lenders, and title companies may review the property's chain of title, including the deed used in prior transfers.

Because a Special Warranty Deed provides limited warranties, purchasers often review the title commitment and obtain title insurance before closing.

 

What Should You Know Before Calling a Real Estate Attorney?

Before contacting a real estate attorney regarding a Special Warranty Deed, gathering the relevant documents may help the attorney evaluate your situation.

Helpful information may include:

  • The current deed

  • The proposed deed

  • The purchase contract

  • The title commitment

  • The title insurance commitment or policy

  • The property's legal description

  • The survey

  • Information regarding liens or mortgages

  • Prior deeds, if available

You should also be prepared to explain:

  • Whether you are buying or selling the property.

  • Whether the property is residential, commercial, or investment property.

  • Whether title issues have been identified.

  • Whether closing has already occurred or is pending.

Understanding the transaction as a whole often helps determine whether a Special Warranty Deed is appropriate and whether additional legal protections should be considered.

 

Frequently Asked Questions About Special Warranty Deeds in Texas

Does a Special Warranty Deed transfer ownership?

Yes. A properly prepared, executed, and delivered Special Warranty Deed transfers ownership according to its terms.

Is a Special Warranty Deed bad for buyers?

Not necessarily. Many real estate transactions use Special Warranty Deeds. Buyers should understand the limited warranties provided and carefully review the title commitment and title insurance policy.

Should I refuse to accept a Special Warranty Deed?

The answer depends on the circumstances of the transaction, the condition of the property's title, and the protections available through title insurance and other documents.

Can a Special Warranty Deed be used for residential property?

Yes. Although commonly associated with commercial transactions, Special Warranty Deeds may also be used in residential transactions.

Does a Special Warranty Deed replace title insurance?

No. The deed and title insurance serve different legal purposes.

Can I prepare my own Special Warranty Deed?

Although deed forms may be available online, errors involving legal descriptions, granting language, ownership interests, or warranties can create significant title problems.

 

Learn More About Texas Real Estate Law

Special Warranty Deeds often overlap with other issues involving title, ownership, and property transfers.

Explore our related Texas real estate law resources:

 

Helpful Resources

The following official resources provide additional information about Texas real estate law and property records:

 

Speak With a Texas Real Estate Attorney About a Special Warranty Deed

The type of deed used in a real estate transaction can affect the rights and obligations of both buyers and sellers.

Understanding the legal effect of a Special Warranty Deed before closing may help avoid future title disputes and ownership issues.

Walter Law, PLLC assists buyers, sellers, investors, and property owners throughout Texas with deed preparation, title matters, real estate transactions, and related legal issues.

Contact Walter Law, PLLC to schedule a consultation with a Texas real estate attorney.

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