North Carolina Warranty Deed Form

What is a North Carolina Warranty Deed Form?

A North Carolina warranty deed—also called a general warranty deed—is a legal document that transfers real estate from the current owner (the grantor) to a new owner (the grantee). A warranty deed provides the grantee a complete warranty of title—the highest level of protection against problems with the property’s title. The grantor warrants a good, clear title and promises to defend the grantee’s title against any third-party claims.

How Warranty of Title Works in North Carolina

A warranty of title in North Carolina refers to the guarantee a seller provides to a buyer in some deeds. A warranty of title consists of one or more promises—or covenants of title—about the property’s title. A North Carolina with a full warranty includes the following covenants from the seller:

• Covenant of seisin. The seller holds legal title to the property.
• Covenant of right to convey. The seller has the right to transfer the property to the buyer.
• Covenant against encumbrances. There are no undisclosed liens, mortgages, taxes, assessments, or other encumbrances impairing the property’s title.
• Covenant of quiet enjoyment. The new owner’s ownership and possession of the property will not be disturbed by legal claims of third parties.
• Covenant of warranty. The seller will take responsibility for any title issues and will defend the buyer’s title against any adverse claims.¹

A warranty of title protects the buyer against problems with the property’s title. If a title problem is discovered, the buyer can recover the financial loss the problem causes from the seller.² Depending on the issue, the buyer’s damages could be the cost of removing a lien, the purchase price for the property, or a reduction in the property’s value.³

Other Names for a North Carolina Warranty Deed Form

The term warranty deed is widely used across the United States to refer to a deed that provides the grantee with a complete warranty of title. The name general warranty deed is sometimes used to distinguish the same type of deed from special warranty deeds and other deeds that provide a limited warranty of title. A few states have their own specific names for deeds that provide a complete warranty. For example, New York uses the name deed with full covenants.

How Do North Carolina Warranty Deed Forms Relate to Other Forms of Deeds?

There are several types of deeds used to change the ownership of North Carolina real estate. The main North Carolina types of deeds offer different degrees of protection to the new owner. Warranty deeds provide the most protection, while special warranty deeds and quitclaim deeds provide less and no protection (respectively):

• Special warranty deed form. A North Carolina special warranty deed form transfers property with a limited warranty of title. The grantor guarantees that he or she has done nothing to impair the property’s title and promises to defend the new owner’s title against third-party claims that arose while the grantor owned the property.⁴ This means that the grantor is not responsible for title issues that existed before the grantor’s ownership of the property.
• North Carolina quitclaim deed form. A North Carolina quitclaim deed form provides no warranties or guarantees regarding the property’s title. A quitclaim deed transfers whatever interest the grantor may have in the property (if any) with no promises about the title’s validity or the absence of encumbrances.⁵

Title Insurance and North Carolina Warranty Deeds

Title insurance is a form of indemnity insurance that protects the grantee (buyer) and/or their lender against financial losses caused by title issues that were not discovered during the title examination process. If a title issues arises, the title insurance company compensates the property owner for the financial damage the issue causes.

When acquiring a property through a North Carolina warranty deed, it is common to obtain title insurance. The warranty deed provides the grantee with the most comprehensive protection against title defects, but title insurance adds an extra layer of protection. If a title defect or encumbrance is discovered after the property has been transferred, the title insurance policy ensures there is a payment source to cover the financial losses up to the policy limits.

North Carolina Warranty Deeds and Other North Carolina Deed Forms

Warranty deeds and estate planning deeds serve different purposes in North Carolina. While a warranty deed is primarily defined by the warranty of title it provides, estate-planning deeds are designed to transfer property upon the owner’s death while avoiding probate.

1. North Carolina life estate deed form. A life estate deed creates a lifetime ownership interest (a life estate) in the property and a remainder interest after the life estate ends. A property owner typically keeps the life estate and gives the remainder to a family member. Upon the owner’s death, the property passes directly to the remainder beneficiary without going through probate.
2. North Carolina enhanced life estate (lady bird) deed form. A North Carolina enhanced life estate deed — also called a life estate with powers or (informally) a lady bird deed—is a special form of life estate deed that allows the owner to retain lifetime ownership of the property and transfer property to a beneficiary outside probate after the owner’s death. The owner also reserves the right to sell, mortgage, or otherwise dispose of the property during the owner’s life without the consent of the beneficiary.⁷

Warranty deeds and estate planning deeds are named for different characteristics, so one deed might be both a warranty deed and an estate-planning deed. For instance, a grantor may transfer property to a living trust using a warranty deed that provides a warranty of title to the trustee.

Transfer-on-Death Deeds in North Carolina

A transfer-on-death deed allows the owner to designate a beneficiary who will receive the property upon the owner’s death. During the owner’s lifetime, he or she retains full ownership and control of the property. Upon the owner’s death, the property transfers to the designated beneficiary without the need for probate. Although North Carolina does not recognize transfer-on-death deeds, owners of North Carolina real estate can accomplish similar goals through life estate deeds, lady bird deeds, and transfers to living trusts.

Common Uses of North Carolina Warranty Deed Forms

A warranty deed in North Carolina is used in real estate transactions to provide the grantee with the highest level of title protection. Some common uses for warranty deeds in North Carolina include:

• Buying or selling residential property. Warranty deeds are often used when selling residential real estate for fair market value. Homebuyers need a strong guarantee of a good title, especially if the purchase if financed.
• Transferring property to a trust. When transferring property into a trust, a warranty deed can be used to provide the trustee with a complete warranty, which can help keep title coverage on the property.
• Refinancing a mortgage. Sometimes, a lender may require a property owner to execute a warranty deed when refinancing a mortgage/

How to Create a North Carolina Warranty Deed Form

As with any deed, a North Carolina warranty deed 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 North Carolina warranty deed must meet North Carolina’s deed requirements and include essential information to describe the transfer. Essential information includes the grantor’s and grantee’s names and addresses, a legal description of the property being transferred, and the name of the person who prepared the deed.

A warranty deed must also have language that clearly indicates the complete warranty of title the deed provides. North Carolina has no short-form language for covenants of title, so the deed must clearly identify the type of deed and describe the warranty.

The grantor must sign the warranty deed in the presence of a notary public, who will verify the grantor’s identity and acknowledge that the grantor executed the deed voluntarily. After the deed has been signed and notarized, it should be recorded with the 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.

1. Ram of Eastern N.C., LLC v. Weyerhaeuser Real Est. Development, No. 4:09-CV-20-D (E.D.N.C. Aug. 23, 2011).
2. Pridgen v. Long, 98 S.E. 451 (N.C. 1919).
3. Markland Adm. v. Crump, 18 N.C. 94 (N.C. 1834).
4. Spencer v. Jones, 84 S.E. 261 (N.C. 1915).
5. Hayes v. Richard, 97 S.E.2d 105 (N.C. 1957).
6. See New Home Building Supply, Inc. v. Nations, 131 S.E.2d 425 (N.C. 1963).
7. Schaeffer v. Haseltine, 46 S.E.2d 463 (N.C. 1948).