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Special Warranty Deed for Foreclosed Properties

1,591 Views | 9 Replies | Last: 10 yr ago by Diggity
texrover91
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anyone know how long special warranty deed survives on a foreclosed property? does it remain in perpetuity?
Stan Crowch
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Yes
sanangeloAG
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Subject to a right of redemption if it's a tax foreclosure.
texrover91
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Thank you !

unmade bed
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I don't really understand the question.

Who signed the special warranty deed and to whom? A special warranty deed is just a deed where the grantor only warrants title during the time the grantor owned the property.
Agilaw
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Length of validity is really not the issue in special warranty deed situations. Under a special warranty deed, title is warranted onlyfrom the grantor and nofurther back than that. The grantor's liability for title defects is therefore
limited to the grantor's period of ownership up to and including conveyance to the
grantee. Commercial properties are often conveyed by special warranty deed. However, in some situations, a special warranty deed may bring up title insurance issues (insurability). Also, adding to sanangeloAG's right of redemption note, if a HOA forecloses on an assessment lien then right of redemption under Texas Property Code will come into play.
texrover91
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Asking b/c our house was started in 2001, finished in 2002 because the original buyer had to buy it back from the bank b/c they foreclosed on the builder/developer before it was dried in.

We purchased from the original owner in 2014, and my memory isn't serving me well - but I think we were provided only a special warranty deed instead of a general warranty deed IIRC.

And the reason why I asked is b/c I'm working on a property tax protest, and my thinking is this:

if the special warranty deed survives the property in perpetuity, my market value or appraisal basis might likely be lower (in theory) relative to other properties based on deed type (?)
Agilaw
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I would check to see what type of deed you received. If it was a normal residential sale/purchase with title insurance involved, it is much more likely that you received a general warranty deed. If title insurance was involved, you really don't have much of a concern other than items that were listed in the policy (exclusions, etc.). If you end up selling the property, you will likely be asked to sign a general warranty deed. On your question about special warranty deed helping you on your property tax protest, I don't think it will help or hurt your cause. It usually comes down to how hard you fight (documentation, comps you can present, etc.) and how much time the authority wants to spend on the protest (they may agree to reduce it some so they don't have to deal with a contest).
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texrover91
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Thank you Agilaw, I'll call the title co in the AM

From what I've read Collin County is generally pretty easy to deal with due to a lack of resources.

I plan to appeal based on unequal appraisal/section 41.43, and I've read some RE/Law types online warning home buyers to "run don't walk" from a special warranty deed so I thought it might help...
Diggity
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I guess you could try that but I don't see them going for it.

They're just going to argue that you bought it in 2014 so whatever you paid for it is the market floor.
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