What Does a Bargain and Sale Deed Convey?
A bargain and sale deed does not warrant against any encumbrances. It does imply that the grantor holds title to the property. Since it does not warrant good title from the grantor, the grantee could be in trouble if title defects appear at a later date. This type of deed is used frequently in tax sales and for foreclosure actions. As with the special warranty deed, other warranties can be conveyed in a bargain and sale deed if they are specifically stated.
Deeds are Great, but There are Limits on Property Rights & Ownership
Owning real estate in the U.S. is a great right, but it is limited in so many ways, some we really don't notice. In other words, when you can lose your property for not doing or paying something, it's important that you pay attention.
Property Taxes: We have local property taxes, sometimes at multiple levels. There are city, county and sometimes state real estate taxes. Failure to pay them when due will ultimately result in a lien on the property at the least, and sale of the tax lien to an investor in many cases. At some point it will be foreclosed and taken.
Homeowner Association Dues: The dues paid to homeowner associations are recorded obligations at the courthouse. Failure to stay current will result in a lien on your property and possible foreclosure at some point. If you sell, the lien will have to be paid off as a part of the closing transaction.
Homeowner Association Rules & Restrictions: Subdivisions and homeowner associations have rules, covenants and restrictions. Sometimes they can be really thick documents with rules for everything from lawn care to the color of paints and roofs. Repeated violation of these rules can in some cases result in a lien on your property for accumulated "fines."
Condominium Association Fees, Covenants and Restrictions: These are the same as homeowner associations, but condos are special in that there are common areas you don't own but are liable for fees and assessments to maintain them. I'm sounding like a broken record here, but failure to pay these fees and dues can result ....oh well, you get the idea.
Mechanics or Material Liens: If you have repairs, equipment replacement or major work done on your home and don't pay as agreed, you will probably find a lien filed on your home. These rarely become a threat to ownership, but if they're accumulating interest, by the time you sell and close on the deal, there could be a really big chunk of cash that you won't get.
Mortgages & Home Improvement Loans: We all know this. The first mortgage takes precedence over second mortgages or home improvement loans. Property taxes take precedence over the mortgages in most cases.
I.R.S. Tax Liens: Within certain limits, if you get way behind in paying your income taxes, you will find liens against you and probably your home. As interest and penalties mount, even if you keep it and then sell, the guv gets their share first.
Municipal Fees & Assessments: Those trash and sewer fees can bite you if not paid, as they're owed to a government or quasi-government entity.
Sometimes a municipality will assess owners for new sewer systems or sidewalks. You get a bill in the mail, and you must pay it, or....
Eminent Domain: Rare, but it can be a big one. Your home is part of an older neighborhood that is in the way of a new county sports stadium. Suddenly you're forced to sell and you're told the price you'll get. You must vacate, as the wrecking ball is coming.
I'm not down on real estate ownership, but it isn't the sacrosanct right that many believe it is. Be realistic, pay attention to the threats to your equity and/or ownership, and you'll be fine most likely. The vast majority of property owners in this country go through their entire lives paying on their mortgages, and they eventually own their homes free and clear or sell them, usually at a bit of a profit.
However, paying off the mortgage doesn't mean your ownership can't be threatened by taxes or other of these risks.