When considering whether to enter into a contract to buy or sell property, you may come across various types of deeds by which title may be transferred. In Washington State, there are three common types of deeds that may be used: a statutory warranty deed, a bargain and sale deed, and a quit claim deed.

Fundamentally, there are certain requirements all deeds must meet under Washington law (RCW 64.04.020) including the following:

• It must be in writing;
• It must contain an accurate legal description of the property; and
• The signature(s) of the transferor/grantor/seller must be notarized.

Beyond these requirements, each type of deed serves a different purpose and provides varying warranties of title to no warranty of title.  Accordingly, it is important to know which form of deed should be used for your conveyance/transaction depending on whether you are the transferee (buyer) or transferor (seller) of the real property interest.

Statutory Warranty Deed

The statutory warranty deed is the most protective form of deed available in Washington for a buyer/transferee. It offers the highest level of assurance to the buyer regarding the property title.  The key features of a statutory warranty deed are as follows:

• Title Assurance: The transferor guarantees that it holds title to the property and that it is free from any encumbrances or other claims affecting title that are not excepted from the conveyance. If an issues arise, such as a claim against the holder of title, the seller/transferor is generally responsible for resolving the claim.
• Covenants: The statutory warranty deed includes several covenants (i.e., promises), such as the covenant of seisin (the transferor owns the interest conveyed and has the right to convey it), the covenant against encumbrances (the property is free from encumbrances), the covenant of quiet enjoyment (the transferee will not be disturbed by someone claiming a superior title), and the covenant of further assurances (the transferor will perform any additional acts necessary to ensure the transferee’s title).
• Protection: Due to the extensive guarantees provided, transferees receive a significant level of protection making this deed a common choice for most transactions, especially ones involving residential property.

Statutory warranty deeds are commonly found in real estate transactions where the buyer/transferee seeks the highest level of protection against potential issues with title to the interest received. This form of deed is often preferred in traditional home transactions due to the comprehensive assurances it provides.

Bargain and Sale Deed

A bargain and sale deed is less protective than a statutory warranty deed but still offers some level of protection with respect to the transferor’s interest in the property.  The key features of a bargain and sale deed are as follows:

• Title Assurance: Unlike the statutory warranty deed, the bargain and sale deed does not offer a guarantee that the transferor holds clear title to the property. Rather, it only implies that the transferor has the right to transfer the property, but it does not include a warranty against defects with the title that accrued prior to the transferor’s ownership.
• Covenants: The bargain and sale deed also includes fewer covenants. Typically, it will include a covenant that the transferor has not conveyed the same property to another party and that the transferor has not created any encumbrances on the property, but it does not guarantee the property is free from all encumbrances.
• Protection: This type of deed conveys the property from the transferor to the transferee but does not provide as many assurances regarding title. This means the risk of claims or issues with title is greater than with a statutory warranty deed, and the transferee may have to deal with title issues which did not arise during the transferor’s ownership.

A bargain and sale deed is often used in transactions where the transferor may not be able or willing to provide the extensive warranties of a statutory warranty deed. This form of deed is often used in transactions related to foreclosures or estates, where the transferor may not have personal knowledge of the title history, and in commercial transactions.

Quit Claim Deed

A quit claim deed is the least protective type of deed available. Rather, no protections or warranties of title are provided.  This form of deed simply transfers whatever interest the transferor may have in the property without any warranty or guarantee regarding title.  Following are some of the key attributes of a quit claim deed:

• No Title Assurance: A quit claim deed offers no assurance about the quality of title. The transferor does not guarantee that it owns the interest conveyed or that title is clear. It simply transfers whatever interest the transferor may have in the property.
• Covenants: A quit claim deed does not provide any express or implied covenants.
• Protection: Because this form of deed provides no warranty or covenant, the transferee stands to assume all risks associated with any claims or defects with title. If any problems with title arise, the transferee may find itself without any recourse against the transferor.

Quit claim deeds are typically used in situations where the parties have a high level of trust and just need to transfer title (i.e., divorce or intrafamily gifting), or where the form of deed is a specifically negotiated item.

Conclusion

Understanding the differences between a statutory warranty deed, bargain and sale deed, and quit claim deed is crucial when deciding which deed is appropriate for your transaction. Each form of deed type offers varying levels of protection and assurances impacting both transferees (buyers) and transferors (sellers) differently. Choosing the appropriate form of deed involves an assessment of risk and negotiating position.. Always consider consulting with a real estate attorney to help guide you through the deed selection process and your real estate transaction. The Real Estate attorneys at Lasher are available to help if you have questions.