Different Types of NC Property Deeds and What They Mean
By: Lindsey Abboushi
To properly convey land in North Carolina, the owner must execute and file a new deed with the register of deeds for the county in which the property is located. The most common types of deeds are the General Warranty Deed, the Special Warranty Deed, and the Non-Warranty Deed (also known as the Quit Claim Deed). Each type of deed provides different promises from the Seller (the “Grantor”) to the Purchaser (the ”Grantee”) and are used in various types of real estate transactions. It is important to understand what conveyance is right for your transaction as title claims can be lengthy and costly.
General Warranty Deed
This type of deed provides the purchaser with the greatest protection. This deed provides a full warranty from the Seller to the Purchaser. The three most important warranties reflect 1) the Seller has good title to the property 2) the Seller has the right and power to convey the property, and 3) the property is free from ALL claims or encumbrances, except as specifically described in the deed.
This deed is typically used in residential transactions where the Seller can assure the Purchaser the history of the property and is willing to be held liable because of that firsthand knowledge but is less common in commercial transactions.
Special Warranty Deed
This type of deed has limited protections, and in some states is called a “limited warranty deed”. The main difference is a Special Warranty Deed only provides the assurances of a General Warranty Deed only during the length of ownership that the Seller had over the property. Any claims arising prior to the Seller’s ownership are not warranted under this type of deed.
This is the most common deed that we see in commercial real estate. The parties typically rely on title insurance rather than representations from the Seller for clear title.
Non-Warranty Deed also known as the Quitclaim Deed
This type of deed has no warranties. The Seller makes no warranties that they have any interest in the property or that the property is free form the claims of others. The seller is only agreeing to convey whatever interest they have, if any. This type of deed is a quick conveyance of whatever interest the Seller does have.
This deed is typically done between family members, situations where there is a relationship between the Seller and the Purchaser (for example, marriage/divorce), and often used to clear title errors on record.
General Deed Requirements
Each county may have different deed requirements. So, a deed sufficient to file in Wake County may not be sufficient in Wilson County. For example, Wilson County now requires a statement affixed to the deed that addresses delinquent taxes, Wake County does not currently have that requirement.
If any of these 7 requirements are not met, the conveyance of real property will fail.
- A competent Seller clearly identified on the deed.
- A Purchaser capable of holding title clearly notified on the deed.
- A sufficient description of the property.
- Words of conveyance such as “grant and convey” “sell and convey” “warrant and convey.”
- Proper execution by the Seller-a notarized signature.
- Proper delivery by Seller to Purchaser.
- Acceptance by the purchaser.
When purchasing or selling property, it is always best to call an attorney to discuss your options as a simple transaction now can be detrimental later if not done correctly.