Oregon Special Warranty Deed Form

What is an Oregon Special Warranty Deed Form?

An Oregon special warranty deed form is a document that transfers ownership of Oregon real estate from the current owner (the grantor) to a new owner (the grantee) with limited warranty of title.¹ Warranty of title is the current owner’s promise that the property conveyed to the new owner is free of undisclosed title defects—such as liens, chain-of-title problems, and adverse third-party claims against the property.²

The warranty of title provided under an Oregon special warranty deed is limited because the current owner’s guaranty only extends to title defects that arose while the current owner owned the property.³ In other words, the current owner’s guaranty does not cover title defects originating before the current owner took title to the real estate.

The Oregon State Legislature has enacted model language for special warranty deeds and three other statutory deed forms used in Oregon.⁴ Oregon’s deed statutes codify the state’s common-law rules regarding each deed form’s effects—promoting consistent, predictable interpretation of Oregon deeds.⁵ The legislature’s model deed language is optional, and the parties to a deed can adjust a deed to reflect the agreed terms—provided the deed satisfies all statutory requirements.⁶

Other Names for an Oregon Special Warranty Deed Form

Oregon statutes and courts both use the term special warranty deed to refer to a deed that conveys real estate with a limited warranty of title.⁷ Some jurisdictions refer to the same basic concept as a limited warranty deed, covenant deed, or grant deed.⁸

A statutory warranty deed is a deed that provides warranty of title based on an authorizing statute enacted by the state legislature. In Oregon, statutory warranty deed is an imprecise term because Oregon statutes authorize both special warranty deeds and general warranty deeds—which provide comprehensive warranty of title. In some states, a statutory warranty deed may be a special warranty deed.

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

Oregon recognizes by statute four principal deed forms: general warranty deeds, special warranty deeds, bargain and sale deeds, and quitclaim deeds. The main characteristic differentiating special warranty deeds from Oregon’s other statutory deed forms is the warranty of title limited according to when a potential title defect arose.

Under Oregon law, warranty of title consists of three related promises—or covenants of warranty—from a property’s current owner to a new owner.

1. When delivering the deed, the property owner holds good title to all property interests described in the deed and the power to transfer those interests.
2. The transferred real estate is free of any liens, title defects, or other adverse claims not disclosed in the deed.
3. The current owner will defend the transferred title against anyone who asserts a claim against the title.⁹

Even if a deed does not expressly include covenants of warranty, Oregon law assumes the current owner signing a special warranty deed makes those three promises to the new owner—subject to an important caveat.¹⁰ The warranty only applies to “encumbrances created or suffered by the grantor,” and the promise to defend the new owner’s title is limited to claims made “by, through, or under the grantor.” ¹¹ That is—a special warranty deed’s warranty of title only applies to the period while the current owner held title to the real estate.

Oregon Special Warranty Deed Form vs. Oregon General Warranty Deed Form

An Oregon general warranty deed form—which the statute just calls a warranty deed—provides complete warranty of title without a special warranty deed’s inherent limitations.¹² The current owner’s covenants of title are the same as with a special warranty deed—except that the guaranty applies to the property’s entire chain of title.¹³

Example. Alice is selling Oregon real estate to Bert. To formally transfer title, Alice executes and records a general warranty deed. After the transfer, a third party seeks to enforce against the property a lien recorded when the property was owned by the person from whom Alice received title. Because Alice signed a general warranty deed, Alice is responsible for any financial loss Bert incurs resulting from the lien. Had Alice signed a special warranty deed, the lien would be Bert’s responsibility because it arose before Alice owned the property.

Oregon general warranty deeds state that the current owner “conveys and warrants” real estate to the new owner.¹⁴ Oregon special warranty deeds state that the current owner “conveys and specially warrants” the real estate to the new owner.¹⁵

Oregon Special Warranty Deed Form vs. Oregon Quitclaim Deed and Oregon Bargain and Sale Deed Forms

Oregon recognizes two statutory deed forms that transfer real estate with no warranty of title: quitclaim deeds and bargain and sale deeds.¹⁶ With either form, the current owner provides no covenants of title—not even a guaranty that the current owner actually owns the real estate.¹⁷ The new owner assumes all the risk of defects in the real estate’s title.

An Oregon quitclaim deed form—sometimes called a release deed—transfers “whatever title or interest…” the current owner holds in the real estate “at the date of the deed…” ¹⁸ An Oregon quitclaim deed does not transfer any after-acquired interests—or interests that do not vest in the current owner until after executing the deed.¹⁹ A property owner transferring Oregon real estate using a quitclaim deed “releases and quitclaims” the real estate to the new owner.²⁰

An Oregon bargain and sale deed form functions similarly to a quitclaim deed except that a bargain and sale deed conveys the current owner’s after-acquired interests in the real estate.²¹ For example, if mineral rights in a property vest in the former owner after the former owner signed a bargain and sale deed, the former owner’s after-acquired mineral rights transfer to the new owner. A property owner transferring Oregon real estate using a bargain and sale deed “conveys” (but does not “warrant”) the real estate to the new owner.²²

Oregon Special Warranty Deed Form vs. Other Types of Oregon Deeds

Oregon recognizes a few other specialized deed forms named for the deed’s purpose. For example, an Oregon transfer on death deed form conveys real estate to a named beneficiary effective upon the current owner’s death without affecting the current owner’s property rights during life.²³ An Oregon transfer on death deed provides no warranty of title even if the deed itself provides otherwise.²⁴

By comparison, an Oregon life estate deed form conveys or reserves a life tenancy in real estate—that is, an interest that endures for the life estate holder’s lifetime.²⁵ A life estate deed also designates a remainderman to receive the property upon the life estate holder’s death. The life estate holder’s rights in the property are limited because the life estate holder must respect the remainderman’s interest. An Oregon life estate deed could also be a warranty, special warranty, quitclaim, or bargain and sale deed—depending on the wording of an individual deed.

Common Uses of Oregon Special Warranty Deed Forms

Special warranty deeds are commonly used for sales of commercial real estate and residential properties a new owner intends to lease to multiple tenants. A purchaser expending a significant sum wants at least some guaranty that he or she is acquiring good title. At the same time, a seller might want to avoid the long-term risk of warranting against unknown title defects that pre-date the seller’s ownership of the property. In this scenario, a special warranty deed splits the difference between a general warranty deed’s complete warranty of title and the as-is nature of a quitclaim or bargain-and-sale deed.

Residential homebuyers—and lenders financing home purchases—typically insist on general warranty deeds. Purchasing or financing a home with a potentially unclear title involves more risk than most homebuyers and mortgage lenders are willing to undertake. On the other hand, warranty of title is less important when the new owner provides little or no consideration for the transfer. A quitclaim or bargain-and-sale deed is an acceptable option for a new owner receiving real estate as a gift or inheritance.

A special warranty deed can also be appropriate when the individual signing the deed is a fiduciary representing the real estate’s actual owner. A representative may lack sufficient knowledge or authority to provide a more comprehensive general warranty.

Fiduciaries executing special warranty deeds could include

• Trustees signing for trusts;²⁶
• Officers or board members signing for corporations;²⁷
• Members or managers signing for limited liability companies;²⁸ or
• Personal representatives signing for deceased persons’ estates.²⁹

How to Create an Oregon Special Warranty Deed

Oregon law provides optional model language for each of Oregon’s four statutory deed forms.³⁰ The model form for special warranty deeds is as follows:

[Current Owner’s name], Grantor, conveys and specially warrants to [New Owner’s name], Grantee, the following described real property free of encumbrances created or suffered by the grantor except as specifically set forth herein:

[Legal description of the property conveyed]

[Exclusions to warranty]

[statutory disclosure]

The true consideration for this conveyance is $___.³¹

As reflected in the statutory special warranty deed form, Oregon law requires a statement of the “true and actual” consideration paid for the real estate on a deed’s first page.³² The model language also leaves room for Oregon’s statutory disclosure and a legal description of the transferred property—both of which other Oregon statutes mandate.³³

Oregon law assumes that a special warranty deed transfers the current owner’s entire interest in the real estate and incorporates the three covenants of title discussed above.³⁴ However, the parties to a deed can transfer a lesser ownership interest, modify a deed’s warranty of title, or exclude certain defects from the warranty by including within the deed clear language expressly stating the parties’ intended terms.³⁵ If a deed is unclear, Oregon courts interpret ambiguous provisions in favor of the new owner.³⁶

Though the statutory forms are useful, Oregon law includes numerous additional deed requirements not addressed by the form language.³⁷ To successfully transfer Oregon real estate, a deed must satisfy all requirements under state law and precisely reflect the parties’ agreed terms. A non-compliant or carelessly prepared deed can result in an invalid transfer, unintended obligations, or even exposure to potential liability.

1. O.R.S. §93.855.
2. See O.R.S. §731.190.
3. O.R.S. §93.855(2).
4. See O.R.S. §93.850 – O.R.S. §93.865.
5. See Chaney v. Haeder, 752 P.2d 854 (Or. Ct. App., 1988).
6. See O.R.S. §93.120; O.R.S. §93.870; State ex. rel. Dept. of Trans. v. Tolke, 586 P.2d 791 (Or. Ct. App. 1978).
7. See, e.g., O.R.S. §93.855; Doan v. Doan, 302 P.2d 565 (Or. Sup. Ct., 1956).
8. See, e.g., Ohio Rev. Code §5302.07; Cal. Civ. Code §1092.
9. O.R.S. §93.850(2)(c)(A – C).
10. O.R.S. §93.855(3).
11. O.R.S. §93.855(2).
12. O.R.S. §93.850.
13. O.R.S. §93.850(2).
14. O.R.S. §93.850(1).
15. O.R.S. §93.855(1) (emphasis added).
16. O.R.S. §93.865; O.R.S. §93.860.
17. O.R.S. §93.860(3); O.R.S. §93.865.
18. O.R.S. §93.865(2).
19. O.R.S. §93.865(2).
20. O.R.S. §93.865(1).
21. O.R.S. §93.860.
22. O.R.S. §93.860(1).
23. O.R.S. §93.967(1) and (5).
24. O.R.S. §93.969(4).
25. See O.R.S. §93.150.
26. See O.R.S. §93.210.
27. See O.R.S. §93.410; O.R.S. §60.371.
28. See O.R.S. §63.140(3).
29. See O.R.S. §114.305(4); O.R.S. §114.325(1).
30. See O.R.S. §93.850 – O.R.S. §93.870.
31. O.R.S. §93.855(1).
32. O.R.S. §93.030(2).
33. O.R.S. §93.040; O.R.S. §93.600.
34. O.R.S. §93.120; O.R.S. §93.855(3).
35. O.R.S. §93.120; O.R.S. §93.855(3); State ex. rel. Dept. of Trans. v. Tolke, 586 P.2d 791 (Or. Ct. App. 1978).
36. Hurd v. Byrnes, 264 Or. 591, 598, 506 P.2d 686 (1973).
37. See, e.g., O.R.S. §205.232; O.R.S. §205.234; O.R.S. §93.010.