Legal Definitions - bargain-and-sale deed

A bargain-and-sale deed is a legal document used to transfer ownership of real estate from one party (the grantor) to another (the grantee). It is a type of deed that implies the grantor holds title to the property but offers only a limited warranty regarding that title.

Specifically, with a bargain-and-sale deed, the grantor guarantees that they have not done anything to encumber or create defects in the title *during their period of ownership*. However, unlike a more comprehensive "warranty deed," it does *not* guarantee against any title defects or claims that may have existed *before* the grantor acquired the property. This means the buyer (grantee) takes on more risk regarding the property's title history.

Here are some examples of when a bargain-and-sale deed might be used:

• Foreclosure Sales: When a bank or lender sells a property they acquired through foreclosure, they often use a bargain-and-sale deed. The bank wants to transfer the property efficiently but does not want to be held responsible for any title issues that might have existed before the previous homeowner defaulted or before the bank took possession. They are essentially saying, "We own this property now, and we haven't done anything to harm its title, but we can't guarantee its entire history before our ownership."

• Estate Sales: An executor or administrator selling property from a deceased person's estate might use a bargain-and-sale deed. The executor has the legal authority to sell the property but typically has no personal knowledge of its full title history or any potential hidden claims. By using this type of deed, the estate can transfer the property without taking on liability for unknown defects that predate the deceased's ownership or the executor's involvement.

• Government or Corporate Transfers: A municipality selling property due to unpaid taxes, or a large corporation divesting itself of a surplus asset, might opt for a bargain-and-sale deed. In such cases, the seller wants to transfer their interest in the property without providing extensive warranties about its past. The buyer, often another sophisticated entity, would typically conduct thorough due diligence to assess the title risks themselves.