Oklahoma Special Warranty Deed Form

What is an Oklahoma Special Warranty Deed Form?

An Oklahoma special warranty deed is a legal document transferring Oklahoma real estate with limited warranty of title. Unlike general warranty deeds and quitclaim deeds, Oklahoma does not expressly authorize special warranty deeds by statute. Legal authority for special warranty deeds is based on common law and the parties’ right to define the terms of conveyance contractually.¹

Warranty of title is the current owner’s guaranty to the new owner that a deed conveys clear title to real estate.² Warranty of title protects the new owner against financial loss from title defects—such as outstanding liens and mortgages, an invalid title caused by a prior faulty conveyance, or a third-party claim against the property.³ A current owner who provides warranty of title agrees to bear the risk of undisclosed defects and—if a defect emerges—to defend the new owner’s title.⁴

An Oklahoma special warranty deed’s warranty of title is limited because the warranty only extends to title defects that arose while the current owner held title.⁵ The warranty does not cover defects rooted earlier in the property’s chain of title.

Other Names for an Oklahoma Special Warranty Deed Form

Real estate deeds that provide limited warranty of title have a variety of names—depending on the jurisdiction. The Oklahoma Supreme Court and Oklahoma lawyers favor special warranty deed.⁶ Some states use limited warranty deed⁷—which the Oklahoma Supreme Court has also used occasionally.⁸ A few states describe a deed with the same essential function as a grant deed or covenant deed.⁹

How do Oklahoma Special Warranty Deed Forms Relate to Other Forms of Deeds?

A special warranty deed gives the new owner partial protection against title defects—splitting the risk according to when a defect arose.¹⁰ Each party’s precise percentage of risk depends on an individual transaction’s circumstances. An owner who held title for twenty years assumes greater risk under a special warranty deed than an owner who owned the real estate for twenty days. Each party, though, carries some risk.

By dividing the risk of unknown title defects, special warranty deeds represent a compromise between Oklahoma’s two statutorily recognized deed forms. General warranty deeds and quitclaim deeds place all the risk on the current owner and the new owner, respectively.

• Oklahoma General Warranty Deed Form. An Oklahoma general warranty deed—which Oklahoma’s statute calls simply warranty deed—transfers ownership with complete warranty of title.¹¹ The current owner guarantees the deed transfers good title—free from undisclosed defects—and promises to defend the new owner’s title if a third-party claim emerges later. The guaranty covers the property’s entire chain of title. The new owner can sue the current owner for breach of warranty if the new owner sustains financial harm caused by a title problem—regardless of when the problem arose.¹²
• Oklahoma Quitclaim Deed Form. An Oklahoma quitclaim deed transfers real estate with no warranty of title.¹³ A quitclaim deed conveys all title, rights, and interest the current owner holds—but with no guaranty as to the title’s validity. The new owner cannot sue the current owner for breach of warranty—even if the transferred title is entirely invalid.

Parties to an Oklahoma deed can purchase title insurance to transfer the financial risk of unknown title defects to an insurance company. A title insurance policy is a contract under which the insurer agrees to cover any losses resulting from title defects like unknown liens, a defective chain of title, or adverse third-party claims.¹⁴ Title insurance potentially protects both parties to a special warranty deed.

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

Oklahoma recognizes several other specialized deed forms that can be useful in estate planning. An Oklahoma transfer on death deed form—also called TOD deed—allows a property owner to revocably designate a beneficiary to receive title to real estate upon the owner’s death.¹⁵ Real estate transferred by a TOD deed passes to the beneficiary outside of probate and never becomes part of the owner’s estate.¹⁶ A TOD deed does not limit the owner’s rights in the property during life.¹⁷

An Oklahoma life estate deed form grants or reserves an ownership interest in real estate—called a life tenancy—that lasts for the remainder of the interest holder’s life.¹⁸ A remainderman named in a life estate deed takes title when the life tenancy concludes.¹⁹ A life estate deed—unlike a TOD deed—limits the owner’s right to sell, transfer, and use the property during life.

An Oklahoma life estate deed that conveys property with limited warranty of title can also be a special warranty deed. Oklahoma TOD deeds are based on a statutory form that does not provide warranty of title.²⁰ The beneficiary receives the real estate subject to recorded liens, mortgages, and other claims against the property.²¹ A TOD deed therefore cannot also be a special warranty deed.

Common Uses of Oklahoma Special Warranty Deed Forms

Special warranty deeds typically evidence sales of real estate following arms-length negotiations. The most common context for a special warranty deed is a sale of commercial real estate or multi-unit property the purchaser intends to lease to tenants. Parties to a sale of single-family residential real estate may use a special warranty deed, but it is less common. Homebuyers and mortgage lenders typically insist on a general warranty deed.

Special warranty deeds are often appropriate in the commercial sale context because they recognize the interests of both parties. The buyer receives some assurance that the seller believes the deed transfers good title. The seller can confidently guaranty no defects arose while the seller owned the property while avoiding long-term risk exposure for issues outside the seller’s knowledge.

A fiduciary transferring real estate on a represented person’s behalf may also wish to use a special warranty deed. Fiduciaries sometimes lack sufficient power or knowledge to issue a general warranty. A special warranty deed may be acceptable to a purchaser not willing to accept a quitclaim deed.

Any of the following transactions could involve a fiduciary’s execution of a special warranty deed in favor of a purchaser:

• A trustee of an express trust conveys real estate held by the trust.²²
• The president of a corporation conveys real estate owned by the corporation.²³
• A member or manager of an LLC conveys company-owned real estate.²⁴
• A general partner conveys real estate owned by a limited partnership.²⁵.

How to Create an Oklahoma Special Warranty Deed

Oklahoma’s real estate statutes provide a suggested format for general warranty deeds and quitclaim deeds.²⁶ Oklahoma special warranty deeds are common-law based, and a drafter must therefore carefully prepare a deed to reflect the proper warranty.

The general rule is that a special warranty deed provides the same warranty of title included with a general warranty deed—except the warranty’s coverage is restricted to the current owner’s ownership period.²⁷ A special warranty deed should indicate that the current owner warrants the title to the transferred real estate while unambiguously describing the warranty’s limited scope.²⁸

Oklahoma law assumes that a deed conveys the current owner’s entire ownership interest.²⁹ If an owner holds less than complete title, a deed transfers all title that the owner holds.³⁰ The parties can limit the interest a deed conveys, restrict the scope of the current owner’s warranty, or exclude specific defects from the warranty through clear language built into the deed.

An Oklahoma special warranty deed—like other deeds—must be written and signed by the current owner to make a valid conveyance of real estate.³¹ Oklahoma has other general rules for deed formatting and requirements that a special warranty deed must satisfy.³² A noncompliant deed may result in a failed conveyance or rejection by the county clerk.

Though other states publish special warranty deed forms, it is unwise to transfer Oklahoma real estate using a form prepared for another state. Real estate laws are state-specific, and requirements often differ significantly between jurisdictions. An Oklahoma special warranty deed should be tailored to Oklahoma law and the parties’ agreed terms of transfer.

1. Whayne v. McBirney, 157 P.2d 161 (Okla. 1945).
2. See Okla. Stat. §16-19.
3. See Okla. Stat. §36-709.
4. Okla. Stat. §16-19.
5. Whayne v. McBirney, 157 P.2d 161 (Okla. 1945).
6. See, e.g., Whayne v. McBirney, 157 P.2d 161 (Okla. 1945).
7. Ohio Rev. Code §5302.07.
8. See, e.g., Frater Okla. Realty Corp. v. Allen Lauhon Hdwe. Co., 245 P.2d 1144 (Okla. 1952).
9. See, e.g., Cal. Civ. Code §1092; Mich. Comp. Law §750.275 (prohibiting the use of “warranty deed” when a deed’s warranty of title is not complete).
10. Whayne v. McBirney, 157 P.2d 161 (Okla. 1945).
11. Okla. Stat. §16-19.
12. See Okla. Stat. §16-24.
13. Okla. Stat. §16-18.
14. Okla. Stat. §36-709.
15. Okla. Stat. §1252(A).
16. Okla. Stat. §58-1258.
17. Okla. Stat. §58-1257.
18. Okla. Stat. §16-22(2).
19. Okla. Stat. §60-30.
20. Okla. Stat. §58-1253.
21. Okla. Stat. §58-1255.
22. See Okla. Stat. §60-175.6a.
23. See Okla. Stat. §16-93.
24. See Okla. Stat. §18-2019(B); Okla. Stat. §18-2015(A)(3).
25. Okla. Stat. §54-500-402A.
26. Okla. Stat. §16-40; Okla. Stat. §16-41.
27. Whayne v. McBirney, 157 P.2d 161 (Okla. 1945).
28. See Depuy v. Selby, 195 P. 107 (Okla. 1919).
29. Okla. Stat. §16-29.
30. Boys v. Long, Okl., 268 P.2d 890 (Okla. 1954).
31. Okla. Stat. §16-4(A).
32. See, e.g., Okla. Stat. §19-298(A) and (B); Okla. Stat. §68-32-3203(C).