Types Of Deeds Transfering Property In Colorado

Dated: January 8 2019

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So you are making an offer on a vacation condo in Vail, CO Congrats! Now you need to decide what type of deed will transfer the property from Grantor ( seller ) to the Grantee ( buyer) There are  four basic  "types”  Deeds in Colorado. Below is a brief description of each type of deed and what if  may mean for a buyer or seller, This should not be taken as legal advise but basic frame work  for discussion with legal counsel. 


Note each Deed Transfers the same interest in a property from seller to the buyer.  The difference between any of the deed types is exclusively related to the warranties or guarantees that a seller makes to a buyer regarding the quality of title.  

 

General Warranty Deed

 A general warranty deed has been, for many years, the traditional deed that has been offered in a residential transaction in Colorado.  It is typically considered the “strongest” form of deed based on the expansive warranties that a seller makes to a buyer in conveying title to a property.  Subject only to any specifically listed exceptions or encumbrances on the deed, the seller warrants the buyer’s title to the property all the way back to the property’s origin.  In short, regardless of whether an encumbrance to title was created by the seller, or some remote previous owner of the property, the seller is warranting to the buyer that they will defend them against any claims on that title.  Period.

 

Special Warranty Deed

Effective January 1, 2019, a special warranty deed will be the new “default” deed in the CBS.  Unless another form of deed box is checked, the seller will be contractually obligated to deliver a special warranty deed to the buyer at closing.  Special warranty deeds have been the common form of deed used in commercial real estate transactions for many years but, for a variety of reasons, they have been very rare in Colorado residential transactions over the years.

 

A seller, when giving a special warranty deed, warrants the buyer’s title to the property only against any encumbrances on the property that were created DURING THE PERIOD OF THE SELLER’S OWNERSHIP OF THE PROPERTY.  As with the general warranty deed, the seller’s warranty is limited by any specifically listed exceptions to the conveyance.

 

In short, the distinction between the two forms of “warranty” deeds is that in a general warranty deed, the seller warrants against anything any owner of the property ever did to encumber title and in a special warranty deed the seller only warrants against anything the seller did to encumber title.

 

Bargain and Sale Deed

A bargain and sale deed is typically NOT a warranty deed (unless specific warranties are expressed on the deed itself).  Therefore, in most cases, the seller is making no warranties as to the quality of title or existence of any encumbrances/exceptions on the property.  The seller is essentially giving the buyer whatever title the seller currently has and, importantly, LATER ACQUIRES in relation to title on the property.  Bargain and sale deeds are uncommon in a typical residential conveyance.  Often, a bargain and sale deed is the statutory form of a deed that may be more commonly referred to as a personal representative’s deed, treasurer’s deed, trustee deed, or guardian deed.  The deed is typically signed by some third-party fiduciary or government official.

 

Quit Claim Deed

A quit claim deed is the simplest form of deed in that it is NOT a warranty deed and it merely conveys whatever interest the seller CURRENTLY has in the property, to the buyer, with no additional warranties or representations whatsoever.  It merely transfers the title of the real property, including any defects or encumbrances, from one party to another.  Quit claim deeds are often used in intra-family transfers, to add or remove someone from title, or to convey a property from individual ownership to a newly created trust or other entity.  This is not to say that a quit claim deed couldn’t be used in a traditional sales transaction if it was, for some reason, the negotiated agreement of the buyer and seller.


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Mark Weinreich

Mark grew up in Baltimore, MD and moved to the Vail Valley in 1992. He didn’t wait long after moving here to open what is now one of the most successful ski shops in the valley, Venture Sports. Seve....

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