Final answer:
A special warranty deed only includes the grantor's warranty against title issues that arose during their ownership and does not assure the title is free of all encumbrances unless specifically stated.
Step-by-step explanation:
When the grantor provides a special warranty deed, there is a common misconception about what is being warranted. A special warranty deed actually includes only two key promises made by the seller. The first (I) is that the grantor only warrants against title issues or claims that arose during the period of their ownership of the property.
This means the seller is guaranteeing that they have done nothing during their ownership that has created a problem with the title. The second (II) is often mistaken; the warranty does not inherently assure that the title is free and clear of all encumbrances. Instead, any such encumbrances should be specifically listed in the deed itself. If the title is later discovered to have issues that occurred before the grantor’s ownership, the grantor is not responsible for defending it under a special warranty deed.
This is in contrast to a general warranty deed, where the grantor does warrant that there are no encumbrances at all, whether they arose before or during the grantor's period of ownership, and will defend the title against all claims.