What is Warranty of Title?

A warranty of title is referred to as a type of guarantee given by a seller to the buyer. It states that the seller and nobody else has got the right to transfer ownership to the property.

Additionally, a warranty of title could also be used as a guarantee that no other party can get the trademark, patent or copyright in the transfer of property.

Explaining Warranty of Title

A warranty Deed, which is used to transfer the property legally in a sale, carries the formal warranty of title. This document reassures that the seller has got the legal right to transfer property. Also, it guarantees that no other entity, such as a parent or an ex-spouse has possession or claim of the property.

The warranty of title, in a warranty deed, safeguards the interest of buyers and provides a legal remedy in case any entity tries to claim that specific property. While there is no clear title guarantee; however, the grantor signs their interest in the property effectively.

If, later, ownership question arises, the buyer wouldn’t have the kind of protection that a warranty of title grants.

Using a Warranty of Title for Confirming a Transaction

In most of the sales, a warranty of title is automatic. However, if the seller is being a representative, no warranty of title would exist. Such type of scenario may come up in an auction or during the sale of the estate.

Under these circumstances, the person who is selling the property isn’t the owner; thus, might not be abreast with the rights of other entities in that property. For instance, an Heir of a previous owner may have unresolved claims to the property that the seller doesn’t know.

However, here, the buyer has an opportunity to use legal actions so as to recoup the invested money. Some other risks to completing the transaction may include present disputes regarding the boundaries that outline the property.

The owners of an adjacent property may claim that the lines are different from what the seller is presenting to a buyer. Furthermore, to complicate the transaction even more, there might be the presence of unpaid Taxes and bills.

If the property is absolutely free of impairments and ownership is adequately established, the seller may provide a warranty of title without any hindrances.