Colorado Special Warranty Deed Form

What Is a Colorado Special Warranty Deed Form?

A Colorado special warranty deed is a recorded instrument that transfers real estate with limited warranty of title. A warranty of title is an enforceable promise from the property’s current owner—the grantor—to the new owner—the grantee—that the property’s title is free of defects. Potential title defects could include outstanding tax liens, mechanic’s liens, boundary disputes, or uncertainty in a property’s chain of title.

A special warranty deed’s warranty is limited in that the promise only extends to the current owner’s “period of ownership of the property.”¹ The current owner is not responsible for title defects based on events that occurred while someone else owned the real estate.²

Colorado general warranty deeds and quitclaim deeds are also defined by the warranty of title the property owner offers. General warranty deeds—or just warranty deeds—provide a complete warranty of title that applies regardless of when a title defect arose.³ Quitclaim deeds convey an owner’s interest in real estate with no warranty of title.⁴

Though special warranty deeds are derived from common law, the Colorado Legislature specifically authorized special warranty deeds through a statutory amendment effective in 2019.⁵ The statute provides model vesting language that marks a deed as a special warranty deed.⁶ The model language by itself is insufficient to create a valid and recordable Colorado deed, as Colorado law includes numerous deed requirements not built into the model vesting language.⁷

Other Names for a Colorado Special Warranty Deed Form

Both Colorado’s statute and Colorado courts call deeds transferring real estate with limited warranty of title special warranty deeds.⁸ Some states use the synonyms limited warranty deed, covenant deed, and grant deed⁹—though special warranty deed is most common.

How Do Colorado Special Warranty Deed Forms Relate to Other Forms of Deeds?

Special warranty deeds represent a middle position in terms of allotting the risk of title defects. Both the current owner signing a special warranty deed and the new owner accepting the deed assume a share of the risk. Other Colorado deed forms place the risk squarely on one party or the other.

• General Warranty Deed Form. A Colorado general warranty deed form—or just warranty deed in the state statute—provides complete warranty of title. When signing a Colorado general warranty deed, the current owner makes five promises to the new owner embodied in three statutory provisions.
  1. When signing the deed, the current owner holds full title to the real estate.
  2. When signing the deed, the current owner has the right to transfer title to the property.
  3. The property’s title is free of liens or other defects not disclosed in the deed.
  4. No claimant will assert superior title to the real estate.
  5. If an adverse claim arises, the current owner will defend the new owner’s title.¹⁰
• Special Warranty Deed Form. A Colorado special warranty deed form provides warranty of title limited to the period while the current owner held title.¹¹ The covenants are the same as with a general warranty deed, but the current owner’s duty to defend the title only extends to adverse claims derived from or through the current owner’s title.¹²
• Quitclaim Deed Form. A Colorado quitclaim deed form—or release deed—comes with no warranty of title. The new owner bears all the risk of title defects.¹³
• Bargain and Sale Deed Form. A fourth Colorado deed form—a bargain and sale deed—works almost like a Colorado quitclaim deed. As with a quitclaim deed, a bargain and sale deed conveys real estate with no warranty of title. The difference is that a Colorado quitclaim deed transfers whatever interest the current owner holds when executing the deed, and a bargain and sale deed also transfers interests the current owner acquires after the deed is signed.¹⁴

Colorado Special Warranty Deed Forms and Other Colorado Deeds Used in Estate Planning

A few other Colorado deed forms are more specialized and are named for their purposes or the person who signs the deed. Any of the following could be a special warranty deed, general warranty deed, quitclaim deed, or bargain and sale deed—depending on the circumstances and specific deed:

• Beneficiary Deed Form. Also called a transfer-on-death deed or TOD deed, a Colorado beneficiary deed transfers real estate to a named beneficiary effective upon the current owner’s death.¹⁵
• Life Estate Deed Form. A life estate deed is a common law deed form that transfers or reserves a lifetime interest in real estate to a life tenant and designates a remainderman to acquire the property after the life tenant’s death. Life estate deeds are no longer common in Colorado due to the authorization of beneficiary deeds by the Colorado Legislature.
• Personal Representative’s Deed Form. A personal representative deed form—sometimes called an executor’s deed—transfers property from a deceased person’s estate to a beneficiary of the estate, purchaser, or other assignee.¹⁶ Personal representative’s deeds are issued in connection with formal probate proceedings.

Common Uses of Colorado Special Warranty Deed Forms

The parties to fair-market-value sales of commercial or multi-family residential real estate often use special warranty deeds. Purchasers typically insist on at least some warranty of title, but sellers are reluctant to assume risks regarding matters of which they lack knowledge and control. A special warranty deed splits the difference by guaranteeing the purchaser that the seller has good title and is not aware of any title defects without obligating the seller for matters that pre-date the seller’s ownership.

Single-family residential real estate purchases ordinarily involve general warranty deeds. Homebuyers cannot risk acquiring a home with less than clear title—particularly when a mortgage is involved.

With either form of Colorado warranty deed, a lender financing a real estate purchase often requires title insurance as a condition of financing. The insurance protects the buyer, seller, and lender against the financial risks of title defects, and the title examination conducted before the insurer issues the coverage helps identify potential defects.¹⁷

Special warranty deeds are also common when the person signing the deed is a fiduciary acting on behalf of the property’s legal owner. Fiduciaries are less likely to have personal knowledge of a property’s history and may not be empowered to offer complete warranty of title.

A fiduciary executing a special warranty deed might be

• A trustee acting for a living trust;¹⁸
• A corporate officer acting for a corporation;¹⁹
• A member or manager acting for an LLC;²⁰
• A personal representative acting for a deceased person’s estate;²¹ or
• A conservator acting for a protected person.²²

How to Create a Colorado Special Warranty Deed

Colorado law provides the following model language for use in creating special warranty deeds:

……………….., whose street address is ……………………, City or Town of ……………………, County of …………………… and State of ……………………, for the consideration of ………….. dollars, in hand paid, hereby sell(s) and convey(s) to ……………….. whose street address is ……………….., City or Town of ……………….., County of ……………….. and State of ……………….., the following real property in the County of …………………… and State of Colorado, to wit: …………………… with all its appurtenances and warrant(s) the title to the same against all persons claiming under me, subject to ……………………. .

Signed this ……………….. day of ……………….., 20…..²³

A Colorado special warranty deed need not include a verbatim recitation of the model language. As long as deed language is “substantially similar” to the model language, Colorado law assumes the deed is a special warranty deed.²⁴ The crucial phrases are that the current owner “sells and conveys” the real estate to the new owner “and warrant(s) the title to the same against all persons claiming under me.”²⁵ By comparison, the current owner signing a general warranty deed “warrants the title to the same.”²⁶

A Colorado special warranty deed is assumed to transfer the current owner’s full, absolute interest in the real estate and to include the covenants discussed above.²⁷ However, a deed can convey a lesser interest, reserve interests, or modify the warranty through clear language incorporated within the deed.²⁸

The current owner can also limit the warranty of title by including within the deed a statement that the warranty is made “subject to statutory exceptions.”²⁹ When that phrase is present, the warranty excludes current-year and subsequent years’ real estate taxes, matters recorded in the county land records, and matters ascertainable through an inspection of the property.³⁰

Colorado law has additional deed requirements that apply to all deed forms—not just special warranty deeds.³¹ Even if a deed includes the model special warranty deed language, the deed may be invalid or unrecordable if it does not satisfy Colorado’s other requirements.

Deed requirements differ from state to state—sometimes substantially—and there can be significant variances in how special warranty deeds are treated between jurisdictions. It is vital for a deed transferring Colorado real estate to be tailored to Colorado law and carefully prepared to correspond to the parties’ exact intentions.

1. C.R.S. § 38-30-113(1)(b).
2. Colo. Land & Res., Inc. v. Credithrift of Am., Inc., 778 P.2d 320, 323 (Colo. App. 1989).
3. C.R.S. § 38-30-113(1)(a).
4. C.R.S. § 38-30-113(1)(d).
5. C.R.S. § 38-30-113.
6. C.R.S. § 38-30-113(1)(b).
7. See, e.g., C.R.S. § 30-10-406(3); C.R.S. § 38-35-122; C.R.S. § 38-30-113(3).
8. C.R.S. § 38-30-113(1)(b); Colo. Land & Res., Inc. v. Credithrift of Am., Inc., 778 P.2d 320, 323 (Colo. App. 1989).
9. See, e.g., Ohio Rev. Code §5302.07; Cal. Civ. Code §1092.
10. C.R.S. § 38-30-113(4)(a)(I – III).
11. C.R.S. § 38-30-113(1)(b).
12. C.R.S. § 38-30-113(4)(a)(III)(B).
13. C.R..S. § 38-30-113(1)(d).
14. C.R.S. § 38-30-113(1)(c) and (d).
15. C.R.S. § 15-15-404.
16. See, e.g., C.R.S. § 15-11-405(1)(a).
17. See Title Insurance Code of Colorado, C.R.S. §§ 10-11-101, et. seq.
18. See C.R..S. § 38-30-108(1); C.R.S. § 38-30-108.5(1).
19. C.R.S. § 38-30-144(1).
20. C.R.S. § 7-80-405.
21. See C.R..S. §15-11-405(1)(a).
22. See C.R.S. §15-14-425.
23. C.R.S. § 38-30-113(1)(b).
24. C.R.S. § 38-30-113(1)(b).
25. C.R.S. § 38-30-113(1)(b) (emphasis added).
26. C.R.S. § 38-30-113(1)(a).
27. C.R.S. § 38-30-107; C.R.S. § 38-30-113(4).
28. C.R.S. § 38-30-107; C.R.S. § 38-30-113(4).
29. C.R.S. § 38-30-113(5)(a).
30. C.R.S. § 38-30-113(5)(a)(I – III).
31. See, e.g., C.R.S. § 30-10-406(3); C.R.S. § 38-35-122; C.R.S. § 38-30-113(3).