Question 76

Special Warranty Deed limits seller risk by warranting only during their ownership.

A Special Warranty Deed is a type of deed where the seller guarantees that they have not incurred any title defects during their ownership of the property. This limits the seller's liability to only the time they owned the property, providing them with reduced risk.

A) General Warranty Deed

A General Warranty Deed offers the broadest protection for the buyer, as it warrants against all claims, regardless of when they arose. This type of deed does not limit the seller's risk to just the period of their ownership, making it incorrect in this context.

B) Special Warranty Deed

A Special Warranty Deed specifically protects the seller by warranting the title only for the duration of their ownership. This means that the seller is not responsible for any title issues that may have existed before they acquired the property, making this the correct answer.

C) Bargain and Sale Deed

A Bargain and Sale Deed implies that the seller has the right to convey the property but does not guarantee against any title defects. This deed type does not limit the seller's risk to their ownership period, thus making it an incorrect choice.

D) Trust Deed

A Trust Deed is used primarily in the context of securing a loan and does not pertain to the warranties of title related to ownership. It does not limit seller risk in the way described in the question, making it an unsuitable option.

Conclusion

The Special Warranty Deed is the only option that appropriately limits seller risk by providing a warranty only during the seller's period of ownership. In contrast, the other options either do not provide a limited warranty or serve different purposes entirely, confirming that B is the definitive correct answer.