Buying real estate in California is a significant financial decision, whether it’s a home in San Jose or an investment property in San Francisco. Deeds often include warranties—legal promises made by the seller to the buyer—that protect ownership rights. When those promises prove to be untrue, it can lead to costly disputes. Let’s explore what constitutes a breach of real estate warranty and when legal action may be necessary.
What Is a Real Estate Warranty?
In California, a real estate warranty is a promise made in a deed that relates to the ownership and title of a property. These warranties don’t address the physical condition of the home; instead, they ensure that the seller has the legal right to transfer ownership and that the buyer’s ownership will not be disturbed by claims from others.
California law recognizes both general warranty deeds and special warranty deeds. A general warranty provides the broadest protection, covering the entire history of the property’s title. A special warranty is narrower, protecting only against issues that arose during the seller’s ownership of the property.
Common Types of Warranties in California Deeds
Several covenants—promises related to title—are commonly included in deeds under California Civil Code §§ 1105–1114:
- Covenant of Seisin: The seller truly owns the property and has the right to sell it.
- Covenant Against Encumbrances: The property is free from hidden liens, easements, or restrictions.
- Covenant of Quiet Enjoyment: The buyer’s ownership won’t be challenged by a third party with a valid legal claim.
- Covenant of Warranty Forever: The seller will defend the buyer’s title against all lawful claims that may arise in the future.
For example, a San Jose buyer might later discover that a previous lender filed a lien on the property that was never cleared. Alternatively, a San Francisco condo purchaser may encounter an undisclosed easement that restricts their use of the unit. Both situations can trigger warranty disputes.
What Constitutes a Breach of Real Estate Warranty?
A breach occurs when one of these promises turns out to be untrue. Common examples include:
- The seller did not actually own clear title to the property.
- The buyer discovers an undisclosed lien, tax debt, or easement.
- A third party successfully challenges the buyer’s right to the property.
These breaches may be uncovered shortly after purchase or years later, and they can significantly affect the property’s value or the buyer’s ability to use it.
Remedies for a Breach of Warranty
California law provides several remedies for breaches of real estate warranties:
- Damages: Buyers may recover financial losses associated with the defect in title, such as the cost of removing a lien.
- Rescission: In rare cases, the court may unwind the sale entirely.
- Defense of Title: The seller may be required to step in and defend the buyer’s ownership rights in court.
The exact remedy depends on the type of warranty given and the scope of the breach. Courts generally aim to place the buyer in the position they would have been in had the warranty been true.
Preventing Warranty Disputes
While breaches cannot always be avoided, buyers and sellers can take steps to reduce the risk of disputes:
- Conduct a thorough title search before closing.
- Purchase title insurance to protect against unknown defects.
- Clearly disclose all liens, easements, and restrictions during the transaction.
- Work with a qualified California real estate attorney to review deeds and ensure warranties are accurate.
Being proactive often saves significant time and money in the long run.
San Jose Real Estate Attorneys
A breach of real estate warranty can lead to costly disputes and unexpected challenges, but California law provides remedies to protect property buyers. Whether the issue is an undisclosed lien in San Jose or a title challenge in San Francisco, understanding your rights is the first step toward resolving the matter.
At BoyesLegal, we represent buyers and sellers in real estate warranty disputes throughout California. Our attorneys can review your deed, uncover hidden risks, and take action if a breach has occurred. Contact us today to schedule a consultation and protect your property rights.
Frequently Asked Questions
What is the difference between a general warranty deed and a special warranty deed?
A general warranty deed covers the entire history of the property’s title, while a special warranty deed only covers the period during which the seller owned it.
Can a seller be held liable for an undisclosed lien?
Yes. If a seller promises that a property is free of encumbrances and a lien later surfaces, it can be a breach of warranty.
Do I still need title insurance if I receive a warranty deed?
Yes. Title insurance provides added protection in the event that defects or claims arise that were not disclosed or discovered prior to closing.