New York Deed with Full Covenants Form

What is a New York Deed with Full Covenants Form?

A New York deed with full covenants—sometimes called a warranty deed or general warranty deed—is a legal document used to transfer real estate with a complete warranty of title. The current owner (grantor) guarantees the new owner (grantee) a good title and promises to take responsibility for any title issues that may arise. In New York, a deed with full covenants offers the highest level of protection to the grantee, as it guarantees a clear title throughout the property’s history.

New York law provides a model deed with full covenants forms for transfers from individuals and for transfers from corporations.¹

How Warranty of Title Works in New York

A warranty of title is a guarantee provided by the seller to the buyer when signing a deed. The guarantee consists of one or more promises—called covenants of title—dealing with the status and quality of the property’s title. Different types of New York deeds include different covenants of title and therefore provide differing levels of protection to the new owner.

A New York deed with full covenants provides the new owner a complete warranty of title made up of five covenants of title given by the seller:²

1. Covenant of seisin. This seller has legal ownership of the property and has the right to transfer the property to the buyer.
2. Covenant of quiet enjoyment. The seller guarantees that the buyer’s ownership and possession of the property will not be disturbed by any lawful claims of third parties.
3. Covenant of freedom from incumbrances (or covenant against encumbrance). There are no undisclosed liens, earlier transfers, taxes, assessments or other encumbrances that affect the property’s title.
4. Covenant of further assurance. The seller promises to take any actions or sign any documents necessary to the buyer’s ownership of the property.
5. Covenant of warranty. The seller will be responsible for any title problems and will defend the buyer’s title against any lawful claims made by third parties.

How Warranty of Title Protects the New Owner

A warranty of title protects the new owner from financial loss caused by a title problem discovered after the transfer. If a title problem emerges, the seller is legally required to fix the issue or to compensate the buyer for any losses or damages the problem causes. The buyer can sue the seller for breach of warranty if the seller fails to address a title problem or to defend the property’s title against a third-party claim.

Other Names for a New York Deed with Full Covenants Form

The name deed with full covenants is uncommon in states other than New York. Most other states refer to a deed that provides a complete warranty as a general warranty deed or simply warranty deed. These terms are used in New York, also, but deed with full covenants is the term specifically prescribed by New York law.

A few states use the name statutory warranty deed to describe a deed that provides a full warranty. That name indicates that the warranty is based on a model deed form or short-form warranty language authorized by a specific state law. A New York deed with full covenants is authorized by statute, but statutory warranty deed is an imprecise term because New York law authorizes other types of deeds that also provide a warranty.

How Do New York Deed with Full Covenants Forms Relate to Other Forms of Deeds?

In New York, there are several types of deeds used for transferring real estate, each offering a different level of protection and warranties to the new owner. A deed with full covenants provides the most protection. Two other deed forms used in New York—the bargain and sale deed with covenant and the quitclaim deed—give the new owner lesser or no protection against title problems.

• New York bargain and sale deed with covenant form. A New York bargain and sale deed with covenant is similar to what most other states call a special warranty deed. It transfers property with a limited warranty of title that gives the new owner less protection than a deed with full covenants. A seller who signs a bargain and sale deed with covenant guarantees that he or she has not done or allowed anything to cause a problem with the property’s title.⁴ This means that the seller is not responsible for any title issues or encumbrances that existed before he or she took ownership of the property.⁵
• New York quitclaim deed form. A New York quitclaim deed form offers the new owner the least protection, as a quitclaim deed contains no warranty or covenants of title.⁶ The grantor transfers whatever interest he or she may have in the property with no promises about the validity or status of the title. Quitclaim deeds are often used in situations where the grantor’s ownership interest is unclear, or when transferring property between family members or to clear up potential title issues.

A New York deed with full covenants assigns all risk of title problems to the current owner who signs the deed. A quitclaim deed places all risk on the new owner. A bargain and sale deed with covenant divides the risk between the grantor and the grantee—with the responsible party dependent on when a specific title problem arose.

New York Deed with Full Covenants and Title Insurance

Title insurance is a form of indemnity insurance that protects the grantee (buyer) and/or a lender against losses resulting from problems with a property’s title. Title insurance is typically purchased during the closing process of a real estate transaction.

There are two main types of title insurance policies: Owner’s title insurance and lender’s title insurance. Owner’s title insurance protects a grantee’s title to the property, while lender’s title insurance protects the lender’s financial interest derived from a lien or mortgage.

When a New York deed with full covenants is used in a real estate transaction, the grantor provides warranties that guarantee the new owner a good title that will not be disturbed by third-party claims. Title insurance supplements the deed’s protection by obligating the insurance company to cover any financial loss caused by a title problem. This ensures the owner a source of compensation if the seller is unable to pay amounts owed pursuant to the warranty of title. The title insurance company may also arrange for a legal defense of the owner’s title against a claim asserted by a third party.

New York Deed with Full Covenants and Other New York Deed Forms

A New York deed with full covenants is characterized by the complete warranty of title it provides. New York recognizes other deeds that have names based on their use in estate plans to transfer real estate when the owner dies without probate.

A New York life estate deed lets an owner retain lifetime ownership of the property (a life estate) and transfer to another person—called the remainder beneficiary or remainderman—the right to own the property when the owner dies. Upon the owner’s death, the owner’s life estate ends, and the property passes directly to the beneficiary without going through probate. After signing and recording a life estate deed, the owner can only sell complete title to the property with the beneficiary’s consent.⁸

A deed’s warranty of title and its estate-planning function are not mutually exclusive. So, it’s possible for the same deed to be both a deed with full covenants and a life estate deed.

Transfer-on-Death Deeds in New York

In many states, a transfer-on-death (TOD) deed allows a real estate owner to designate a beneficiary who will receive the property upon the owner’s death. The owner retains complete ownership and control of the property during life and can sell or transfer the property or revoke or amend the TOD deed. Upon their death, the property transfers to the designated beneficiary without the need for probate. New York has not enacted transfer-on-death deed legislation, so TOD deeds are not available in New York.

Common Uses of New York Deed with Full Covenants Forms

A deed with full covenants—also called a warranty deed—is commonly used for New York real estate sales. A homebuyer paying fair market value for residential property, for example, typically wants the strongest guarantee of a good title and the greatest protection against title problems. Mortgage lenders may also require the use of a deed with full covenants as a condition for extending the loan.

Deeds with full covenants may also be used for sales of commercial properties, but a bargain and sale deed with covenant is often used in that scenario. Likewise, an owner can use a deed with full warranty to re-title real estate without changing actual control (such as a transfer to a living trust as part of an estate plan), but quitclaim deeds are more common when a transfer involves no consideration.

How to Create a New York Deed with Full Covenants Form

As with any deed, a New York deed with full covenants should be customized to reflect the specific terms and conditions of the transaction. Reliance on fill-in-the-blank forms can lead to invalid documents and future title issues.

A New York deed with full covenants must meet New York’s deed requirements and include essential information—such as the grantor’s and grantee’s names and addresses, a legal description of the property, and a statement of consideration (the purchase price or other value exchanged). The deed must also have the right language to incorporate the covenants of title that protect the new owner. New York’s statutory model deed with full covenants has language for the covenants of title, but it does not (by itself) satisfy all requirements for a valid, recordable New York deed.⁹

After the deed is properly prepared, the grantor must sign it in the presence of a notary public. The notary public will verify the grantor’s identity and acknowledge that the grantor executed the deed voluntarily. The signed, notarized deed should be recorded with the county clerk or register of deeds in the county where the property is located. Recording the deed provides public notice of the transfer and helps protect the grantee’s rights in the property.

The person who requests recording must pay any recording fees and transfer taxes, if applicable, due for the deed. Requirements and fees may vary by county, so confirming the requirements with the local recording office is a good practice.

1. N.Y. Real Prop. § 258 (Statutory Form A and Form B).
2. N.Y. Real Prop. §§ 253(1)-(5).
3. N.Y. Real Prop. § 327.
4. N.Y. Real Prop. § 258 (Statutory Form C).
5. N.Y. Real Prop. § 253(6).
6. N.Y. Real Prop. § 258 (Statutory Form D).
7. N.Y. Real Prop. § 258 (Statutory Form B).
8. N.Y. Real Prop. § 247.
9. N.Y. Real Prop. § 258 (Statutory Form C).