What Is a Special Purpose Warranty Deed in Real Estate?

A Special Purpose Warranty Deed—sometimes called a Corporate Warranty Deed—is a deed used by banks, builders, relocation companies, estates, and corporations. It guarantees that the grantor did not create any title issues during the time they owned the property but offers no protection for defects that happened earlier.

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💡 Why a Special Purpose Warranty Deed Matters

This deed is widely used in commercial real estate, REO sales, government transfers, and situations where the seller doesn’t fully know the property’s history. It provides limited protection—only covering the period the seller owned the property.

  • ✔ Guarantees no title issues occurred during the seller’s ownership
  • ✔ Offers no warranties for earlier defects
  • ✔ Frequently used by banks, builders, and government agencies
  • ✔ Often paired with title insurance for buyer protection
  • ✔ Common in corporate and foreclosure-related transactions

Related: What Is a Special Warranty Deed?

📌 Common Reasons a Special Purpose Warranty Deed Is Used

Entities that do not personally occupy or manage the property often rely on Special Purpose Warranty Deeds to limit their liability.

  • Bank-owned (REO) sales
  • Builder or developer sales of new construction
  • Corporate relocation companies
  • Estates or trusts selling inherited property
  • Commercial real estate transactions
  • Government or municipal property transfers

Related: What Is a General Warranty Deed?

🔎 How a Special Purpose Warranty Deed Works

This deed limits the seller’s responsibility to only what happened while they owned the property. Anything before that is the buyer’s responsibility unless covered by title insurance.

  • 1. Entity seller signs a Special Purpose Warranty Deed to transfer title.
  • 2. Warranty covers only the seller’s period of ownership.
  • 3. No protection for earlier title defects, liens, or claims.
  • 4. Buyer typically purchases title insurance for added protection.
  • 5. Common in commercial and REO transactions.

Title issues may require a Quiet Title Action.

❗ FSBO Warning: Special Purpose Warranty Deeds Offer Limited Protection

Buyers should understand that this deed provides much less protection than a General Warranty Deed. It is designed to protect the seller—usually a bank, builder, or corporation.

  • Minimal title protection
  • Does not cover prior title defects
  • Often sold “as-is”
  • Buyer may inherit liens or disputes
  • Title insurance strongly recommended

Learn more: What Is Title Insurance?

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