A Special Warranty Deed (sometimes called a Grant Deed or Limited Warranty Deed depending on the jurisdiction) is a real property conveyance instrument in which the grantor warrants title only against defects that arose during the grantor's period of ownership. Unlike a general warranty deed, which provides warranties extending back to the property's origin of title, a special warranty deed limits the grantor's liability to claims and encumbrances that the grantor personally created or allowed during their ownership. This distinction is codified in state-specific property statutes — for example, Texas Property Code Section 5.023 defines the covenants implied in a deed "with special warranty."

The special warranty deed contains two primary covenants: the covenant that the grantor has not conveyed the same property to anyone else (no prior conveyance), and the covenant that the property is free from encumbrances created by or through the grantor. These are narrower than the six traditional covenants found in a general warranty deed (seisin, right to convey, against encumbrances, quiet enjoyment, warranty, and further assurances), which cover the entire chain of title.

Special warranty deeds occupy a middle ground between general warranty deeds (maximum buyer protection) and quitclaim deeds (no warranties whatsoever). They are the standard conveyance instrument used in commercial real estate transactions, corporate property transfers, and transactions involving foreclosure properties, REO sales, and estate distributions where the grantor cannot reasonably warrant the entire title history.

Special warranty deeds are the standard instrument in commercial real estate transactions because corporate sellers, REITs, and institutional investors typically refuse to warrant title beyond their period of ownership. When a corporation sells an office building, shopping center, or industrial property, the purchase agreement will almost always specify conveyance by special warranty deed rather than general warranty deed, with the buyer relying on title insurance to cover pre-existing defects.

Banks and mortgage servicers use special warranty deeds to convey REO (Real Estate Owned) properties acquired through foreclosure, since the lender has no knowledge of title issues that may have existed before their acquisition. Estate executors and personal representatives frequently use special warranty deeds when distributing real property to beneficiaries or selling estate assets, because they can only warrant against defects arising during the administration period.

Other common scenarios include transfers between related business entities (such as a parent company conveying property to a subsidiary), tax deed sales by county governments, transactions involving property held in land trusts or LLCs, and relocation company buyouts where the relocation firm takes title temporarily before reselling. In states like California, the grant deed — which functions similarly to a special warranty deed — is the default conveyance instrument for most residential transactions, with statutory warranties implied under California Civil Code Section 1113.

The granting clause must identify the grantor and grantee by full legal name, specify the type of conveyance ("grants, bargains, and sells with special warranty" or equivalent statutory language), and state the consideration paid. The deed must include words of conveyance that clearly indicate the grantor's intent to transfer ownership — most states have statutory language that, when used, automatically implies the special warranty covenants without needing to spell them out.

The legal description of the property must be precise and typically takes one of three forms: metes and bounds (geographic bearings and distances), lot and block (referencing a recorded subdivision plat), or government survey (township, range, and section). The legal description must match the description in the grantor's chain of title exactly. Any easements, restrictions, or encumbrances that the conveyance is subject to should be listed as exceptions to the warranty — these are items the grantor is disclosing but not warranting against.

The habendum clause ("to have and to hold") defines the estate being conveyed — typically fee simple absolute, which is complete ownership without conditions. The deed must be signed by the grantor (the grantee's signature is not required), acknowledged before a notary public in compliance with state recording requirements, and recorded in the county recorder's office where the property is located to provide constructive notice to subsequent purchasers and creditors. Many states require the deed to include the property's tax parcel identification number, the preparer's name and address, and a transfer tax declaration or exemption statement. Recording fees and transfer taxes vary by state and county.