Maine special warranty deed

What a special warranty deed does in Maine

A special warranty deed, also called a limited warranty deed or a covenant deed in some states and a grant deed in California, sits between a quitclaim and a general warranty deed. The grantor promises they did nothing during their own ownership to damage the title, and nothing more. Anything that happened before they bought the property is the buyer's risk. Estates, trustees, banks, and builders commonly use it.

In Maine this deed is usually called a quitclaim deed with covenant. Deedly's covenant gives the same promise as Maine's statutory "quitclaim covenant": to defend the title against the lawful claims of everyone claiming by, through or under the grantor, and no one else (33 M.R.S. §§ 765, 766).

The Maine law behind this deed

Start with 33 M.R.S. §§ 765, 766 if you want to read the statute's own language. The table below lists the main statutes behind the rules on this page.

When Maine property owners use a special warranty deed

• Sell a property you inherited or hold as trustee
• Convey a property you have owned only briefly
• Transfer commercial or investment property
• Give a buyer more protection than a quitclaim without accepting unlimited exposure

What Maine requires on the deed

These are the execution and formatting rules registries of deeds enforce. Getting any of them wrong is the usual reason a deed comes back in the mail.

How to complete and record it in Maine

1. 1Find your current deedYou need the legal description from it, word for word. If you can't find your copy, the Registry of Deeds can provide one, usually for a few dollars.
2. 2Identify everyone by full legal nameNames must match the current deed and government ID exactly, middle names included. A mismatch creates a gap in the chain of title that shows up years later at closing.
3. 3Complete the deedDeedly builds it with the wording, notary certificate, and 3-inch first-page margin used for Maine deeds.
4. 4Sign in front of a notaryBring photo ID. Wait to sign until you are in front of the notary: you have to appear before the notary anyway, and signing there leaves no question about who signed.
5. 5Complete Real Estate Transfer Tax Declaration (Form RETTD)Maine requires this alongside the deed, including for exempt transfers. Your filing packet explains which boxes apply to your situation.
6. 6Record it with the Registry of DeedsFile in the county where the property is located and pay the recording fee. Many offices in this state also accept e-recording, but usually only from approved submitters such as title companies. Keep the stamped receipt. It fixes your priority date.
7. 7Update insurance and tax recordsA change of ownership can affect your homeowner's policy, your homestead or senior exemption, and in some states the assessed value. Do this within a few weeks.

What it costs in Maine

Maine charges a real estate transfer tax of $2.20 per $500 of value up to $1,000,000 and $6.00 per $500 above that (any part of $500 counts as $500), half owed by the grantor and half by the grantee (36 M.R.S. § 4641-A). The registry collects the whole tax when the deed is recorded (36 M.R.S. § 4641-B), so agree between you who hands it over. A gift, or a deed stating only a nominal price (less than 20% of the property's adjusted assessed value, such as "$10"), is taxed on the property's market value unless an exemption applies (36 M.R.S. § 4641(3)).

Exemptions that commonly apply to a transfer like this: deeds between spouses, parent and child (stepchildren included), or grandparent and grandchild, when nothing is paid for the deed (36 M.R.S. § 4641-C(4)), deeds between spouses in a divorce (§ 4641-C(4)), deeds into your own revocable living trust, and back out of it to you (§ 4641-C(15)), deeds that only confirm or correct an earlier recorded deed, with nothing more paid (§ 4641-C(3)), and deeds that only change an entity's name or type, with no change in who owns it beneficially (§ 4641-C(19)). You have to claim the exemption. The recorder won't apply it for you.

On a sale for $100,000 or more, Maine requires the buyer to withhold 2.5% of the price and send it to Maine Revenue Services within 30 days, unless the seller gives the buyer a signed certificate, under penalty of perjury, that the seller is a Maine resident, or the seller or buyer has a waiver from Maine Revenue Services (36 M.R.S. § 5250-A). A buyer who fails to withhold owes the tax. Line 10 of the transfer tax declaration asks which exception applies (36 M.R.S. § 4641-D).

Where to record it in Maine

Maine deeds are recorded with the Registry of Deeds in the county where the property sits, not where you live. There are 16 counties in Maine.

Many Maine recording offices accept e-recording through vendors such as Simplifile, CSC, or ePN. E-recording is generally open only to approved submitters such as title companies, attorneys, and lenders, so if you prepared the deed yourself, plan to record in person or by mail. Some offices accept filings from the public through those vendors; your county's website will say.

Recording offices we cover in Maine: Cumberland, York, Penobscot, Kennebec, Androscoggin, Aroostook, Oxford. See all Maine recording offices.

What a special warranty deed does NOT do

Being honest about the limits is more useful than a sales pitch. Every one of these catches somebody out.

• Defects that predate your ownership are not covered. The buyer bears that risk.
• It does not substitute for a title search or an owner's title insurance policy.
• It transfers ownership immediately and cannot be revoked.
• Some purchase contracts specifically require a general warranty deed; check yours before using this one.

Quirks of Maine law that catch people out

• A Maine registry returns a deed unrecorded if its margins are not clean (1 3/4 inches at the top of page one, 3/4 inch at the sides, 1 1/2 inches across the bottom of the last page, with nothing written in them), and will not accept one unless each signer's name, and the notary's, is typed or printed under the signature (33 M.R.S. § 651-A). It also needs the Real Estate Transfer Tax Declaration and the tax, unless the deed is a transfer-on-death or corrective deed (36 M.R.S. §§ 4641-B, 4641-D), and the recording fee (about $40).
• Almost every Maine deed must be accompanied by a Real Estate Transfer Tax Declaration (Form RETTD), even when no tax is due: an exempt transfer enters its exemption code on the form. Title companies and lawyers file it online; you can fill in the form Maine Revenue Services publishes and hand it in with the deed. Transfer-on-death deeds and corrective deeds need none (36 M.R.S. § 4641-D).
• A deed between spouses, parent and child, or grandparent and grandchild is exempt from Maine's transfer tax only if nothing is paid for it (36 M.R.S. § 4641-C(4)). A family sale is taxed like any other, and siblings, aunts, uncles and cousins get no exemption.
• Maine's transfer tax is imposed half on the grantor and half on the grantee: $1.10 each per $500 of value up to $1,000,000, and $3.00 each per $500 above that (36 M.R.S. § 4641-A).
• Maine recognizes transfer-on-death deeds under its Probate Code (18-C M.R.S. § 6-401).

How to hold title in Maine

When two or more people take title in Maine and the deed says nothing more, the law presumes a tenancy in common, which means no automatic survivorship. If you want the survivor to take the whole property, the words have to be on the deed. Forms of co-ownership available in Maine: joint tenancy with right of survivorship and tenancy in common.