What Is the Difference Between a Warranty Deed and a Deed of Trust?

A warranty deed and a deed of trust do different jobs. A warranty deed transfers ownership of real estate with promises about the title. A deed of trust secures a loan with the property. In Florida, loans are secured with a mortgage, and any deed of trust is treated as a mortgage.

Warranty Deed

A warranty deed is the deed commonly used in Florida home sales. The seller (grantor) promises the buyer (grantee) that the seller owns the property, has the right to sell it, and will defend the title against lawful claims. There are two main types:

General warranty deed: the grantor's promises cover the entire history of the title. Florida law provides a short statutory form that carries these full warranties.

Special warranty deed: the promises cover only problems that arose while the grantor owned the property. It is common in commercial sales and sales by banks or builders.

Deed of Trust

A deed of trust is a loan document used in many other states. It involves three parties: the borrower, the lender, and a trustee who holds legal title as security for the loan. In those states, it usually allows the trustee to sell the property without a court case if the borrower defaults.

Florida does not use this system. Florida law treats any instrument given to secure a debt as a mortgage, and mortgages are foreclosed through the courts. A Florida buyer who finances a home signs a note and a mortgage.

Key Differences

• Purpose: a warranty deed transfers ownership. A deed of trust or mortgage secures a loan.

• Parties: a warranty deed has a grantor and grantee. A deed of trust has a borrower, lender, and trustee.

• Foreclosure: in deed of trust states, foreclosure is often out of court. In Florida, it requires a court case.

A real estate attorney can explain which documents a particular Florida transaction needs.