South Carolina Special Warranty Deed Form

What is a South Carolina Special Warranty Deed Form?

A South Carolina special warranty deed is a written instrument transferring a property interest 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 guaranty that a deed conveys real estate with a valid, clear title. A special warranty deed’s warranty is limited because it only covers the time while the current owner owned the property.²

Special warranty deeds are essentially a compromise between South Carolina’s two other deed forms—general warranty deeds and quitclaim deeds—in how they allocate the financial risk of title defects.³ A title defect is a problem with a property’s title that reduces its value or marketability. Potential title defects include unpaid liens or mortgages, an incomplete chain of title, or third-party claims on some or all of the real estate.⁴

A property owner who signs a special warranty deed agrees to bear the risk of title defects that arose while he or she held title. The new owner can look to the prior owner for compensation for financial loss caused by a title defect within the deed’s warranty.⁵ The new owner taking title under a special warranty deed assumes the risk of title defects that pre-date the current owner’s ownership period.

Other Names for a South Carolina Special Warranty Deed Form

The South Carolina Code applies no particular name to deeds transferring real estate with limited warranty of title. South Carolina courts favor special warranty deed—the name most commonly used nationally.⁶ The synonym limited warranty deed is used in several states and appears occasionally in South Carolina case law.⁷

Other less-common names include grant deed and covenant deed—both of which are used formally in a small number of states and sometimes serve as synonyms for special warranty deeds.⁸

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

A South Carolina special warranty deed offers the person acquiring real estate partial protection against unknown title problems. The current owner guarantees that no events occurred impairing the property’s title while the current owner held title.⁹ The current owner promises to stand behind the deed and assume responsibility for any unknown defects within the warranty’s scope.

Special warranty deeds split the risk of unknown title defects between the current and new owners. Two other South Carolina deed forms—general warranty deeds and quitclaim deeds—place all risk on one party or the other.

South Carolina General Warranty Deed Form

A South Carolina general warranty deed—sometimes shortened to just warranty deed—conveys real estate with the most comprehensive warranty of title. The owner guarantees good, clear title and promises to defend the transferred title against future claims—regardless of when in the property’s history events giving rise to a claim occurred.¹⁰ The current owner bears all risk of unknown title defects, and the new owner can sue the current owner for breach of warranty if a defect emerges.¹¹

The South Carolina Code expressly authorizes and publishes a suggested statutory form for general warranty deeds.¹² A deed in the statutory form transfers real estate with a complete warranty—consisting of six common law covenants of title incorporated within the deed.¹³

1. The current owner holds good title.
2. The current owner has the authority to transfer title.
3. The property is free of undisclosed title defects.
4. No third-party claims will disturb the new owner’s possession of the property.
5. The current owner will take any future actions necessary to confirm the new owner’s title.
6. The current owner will defend the title against valid third-party claims.

South Carolina Quitclaim Deed Form

A South Carolina quitclaim deed transfers—with no warranty or covenants of title—whatever interest in the property the current owner can lawfully transfer.¹⁴ The new owner taking title under a quitclaim deed assumes all risk of title defects and cannot recover breach-of-warranty damages from the prior owner if the transferred interest is invalid.

One or both parties to a deed—or a lender financing the property’s purchase—can buy title insurance as protection from financial losses caused by unknown title defects. A title insurance policy is a contract between an insurance company and a policyholder under which the insurer agrees to cover damages that result from unknown problems with a property’s title.¹⁵ A title insurer arranges for legal defense or compensates the insured person for financial damages if a third party asserts a claim arising from an unknown title defect.

South Carolina Special Warranty Deed Forms and Other South Carolina Deeds Used in Estate Planning

Special warranty deeds, general warranty deeds, and quitclaim deeds are multipurpose deed forms for conveying title to a new owner. Each form is named for and defined by the current owner’s warranty to the new owner. South Carolina recognizes several other special-purpose deed forms named for the deed’s function. South Carolina life estate deeds and deeds of distribution—for example—are special-purpose deed forms often relevant to estate planning.

A South Carolina life estate deed transfers a lifetime interest in real estate and a remainder interest after the life-estate holder’s death.¹⁶ Life estate deeds—which can be general warranty, special warranty, or quitclaim deeds—allow real estate to bypass probate and can be useful in estate planning.

A downside of life estate deeds is that the remainder interest limits the life estate holder’s right to sell, mortgage, or transfer the property during life.¹⁷ South Carolina does not recognize transfer-on-death (TOD) deeds—which let a property owner name a beneficiary to take title after the owner’s death without limiting the owner’s current rights.¹⁸

A South Carolina deed of distribution serves a narrow function—conveying title from a deceased owner’s estate to a beneficiary of the estate.¹⁹ An estate’s court-appointed personal representative executes a deed of distribution in connection with the estate- administration process supervised by the probate court.

Common Uses of South Carolina Special Warranty Deed Forms

South Carolina special warranty deeds are typically used in transactions involving an exchange of real estate for fair market value. A special warranty deed often evidences a sale of commercial real estate, multi-unit residential, and other income-producing properties.

Special warranty deeds can be a good option when a conveyance involves a warranty negotiated between the parties, as they are adaptable to compromises reflecting both parties’ interests. The buyer receives a partial guaranty of a valid, defect-free title. The seller avoids undertaking long-term risk involving events outside the seller’s knowledge.

Purchases of single-family residences—by comparison—typically involve general warranty deeds. Homebuyers are not in a position to risk buying a home with a defective title—especially when a mortgage is necessary for the purchase. Lenders also insist—in most cases—that a general warranty deed be backed by title insurance on the mortgaged property.

Agents acting in a fiduciary capacity sometimes use special warranty deeds when executing a deed on behalf of another party. Fiduciaries may lack sufficient authority or first-hand knowledge to be comfortable issuing a general warranty. Any of the following fiduciaries might use a special warranty deed to convey real estate—depending on the specific scenario:

• A trustee conveying title to real estate sold by a trust;²⁰
• An officer of a corporation or member of an LLC conveying title to real estate sold by the business entity;²¹
• An estate’s personal representative or executor conveying title to a buyer purchasing the property from a deceased owner’s estate;²²

How to Create a South Carolina Special Warranty Deed

South Carolina’s only statutory deed form is the form for general warranty deeds.²³ A South Carolina deed in the statutory form provides complete warranty of title—with no limitation on the scope of the deed’s warranty.²⁴ South Carolina law neither requires a complete warranty nor prohibits parties to a deed from agreeing to a limited warranty.²⁵ A property owner can therefore create a special warranty deed by modifying the statutory form’s language to limit the breadth of the warranty.

A special warranty deed’s warranty language must note that the warranty only applies to the period during which the current owner held title. A special warranty clause might state—for example—that the current owner warrants against claims “made by, through, or under the [current owner] or the [current owner’s] heirs.”²⁶

A South Carolina special warranty deed typically includes a granting clause similar to the clause used in general warranty deeds. The granting clause manifests the transfer of the property—stating that the current owner has granted, bargained, sold, and released, and by these presents does hereby grant, bargain, sell, and release the real estate to the new owner.²⁷

All South Carolina deeds—including special warranty deeds—must comply with South Carolina’s laws governing real estate conveyances. South Carolina deeds must be correctly formatted for recording and set forth an adequate property description.²⁸ Deeds other than quitclaim deeds must identify the source of the current owner’s title—typically by referring to the prior deed that transferred the property to the current owner.²⁹

The current owner must sign the deed, and the deed must be notarized and witnessed.³⁰ The owner—after executing the deed—delivers it by performing an act demonstrating the owner’s intent to transfer control of the deed and ownership of the property.³¹ The new owner or another interested party then records the deed with the county register of deeds to place third parties on constructive notice of the transfer.³²

When transferring South Carolina real estate, it is important to use a deed form tailored to South Carolina law. A deed created for another state may comply with that state’s laws but be wholly ineffective in conveying South Carolina real estate. A South Carolina special warranty deed form should satisfy all South Carolina requirements and accurately reflect the terms of conveyance agreed by the current and new owners.

1. S.C. Code §27-5-130(A).
2. Knotts v. Joiner, 59 S.E. 2d 850 (S.C. 1950).
3. See Bennett v. Investors Title Ins. Co., 635 S.E. 2d 660 (S.C. Ct. App. 2006).
4. See S.C. Code §38-1-20(59).
5. Morris v. Lain, 174 S.E.2d 590 (S.C. 1934).
6. See, e.g., Knotts v. Joiner, 59 S.E. 2d 850 (S.C. 1950).
7. See, e.g., Ohio Rev. Code §5302.07; Lawhorne v. Soltis, 384 S.E.2d 662 (Ga. 1989); Woodle, et. al v. H.L. Tilghman, et. al, 107 S.E.2d 4 (S.C. 1959).
8. See, e.g., Cal. Civ. Code §1092; Mich. Comp. Law §750.275 (Michigan law prohibiting use of the term warranty deed within a deed that does not provide complete warranty of title).
9. Knotts v. Joiner, 59 S.E. 2d 850 (S.C. 1950).
10. See Black v. Patel, 594 S.E.2d 162 (S.C. 2004).
11. Morris v. Lain, 174 S.E.2d 590 (S.C. 1934).
12. S.C. Code §27-7-10.
13. See Martin v. Floyd, 317 S.E.2d 133 (S.C. Ct. App. 1984) (declaring that a general warranty deed in the statutory form implicitly includes six covenants from the current owner to the new owner).
14. Mulherin-Howell v. Cobb, 608 S.E. 2d 587 (S.C. Ct. App. 2005).
15. See S.C. Code §38-1-20(59).
16. See Glasgow v. Glasgow, 70 S.E.2d 432 (S.C. 1952).
17. Belue v. Fetner, 164 S.E.2d 753 (S.C. 1968).
18. First Union Nat’l Bank of S.C. v. Shealy, 479 S.E.2d 846 (S.C. Ct. App. 1996).
19. S.C. Code §62-3-908.
20. See S.C. Code §62-7-816(2) and (25).
21. See S.C. Code §33-44-301(b)(1); S.C. Code §33-8-410.
22. S.C. Code §62-3-711(b) (personal representative may only sell real estate owned by the estate if the deceased owner’s will calls for a sale or the probate court approves the sale).
23. S.C. Code §27-7-10.
24. Bennett v. Investors Title Ins. Co., 635 S.E. 2d 660 (S.C. Ct. App. 2006).
25. S.C. Code §27-7-20.
26. Bennett v. Investors Title Ins. Co., 635 S.E. 2d 660 (S.C. Ct. App. 2006), citing Black’s Law Dictionary 1581 (7th ed. 1999).
27. S.C. Code §27-7-10.
28. See S.C. Code Regs. §12-501.1; S.C. Code §30-5-35(a); S.C. Code §30-5-250.
29. S.C. Code §30-5-35(a) (requiring derivation clause).
30. S.C. Code §30-5-30; S.C. Code §27-7-10.
31. See First Union Nat’l Bank of S.C. v. Shealy, 479 S.E.2d 846 (S.C. Ct. App. 1996) (executed deed left in the care of the owner’s attorney until after the owner’s death did not transfer title because the deed was not delivered).
32. S.C. Code §30-7-10.