Warrandice is a personal guarantee about a the condition of a property’s Title given by a seller during the sale of a property. It is similar to a ‘title guarantee’ in other jurisdictions.
The primary goal of warrandice is to protect the buyer. It provides a measure of security, ensuring that the property you are buying is free from hidden problems or claims that could affect their ownership or use of the property.
If, after the sale, it turns out there was an undisclosed issue or claim related to the property, and it affects the buyer’s rights, the warrandice allows the buyer to seek redress from the seller. This could be in the form of compensation or some other legal remedy.
What does a personal guarantee of warrandice protect a buyer against?
According to the law society, there are four aspects to warrandice.
- The seller guarantees they legally own the property being sold and therefore have the right and ability to transfer it to you.
- The seller guarantees they have informed the purchaser of all known title conditions
- The seller guarantees no one else has rights to reside in, use or sell the property
- The seller guarantees they will not do anything going forward to prejudice the title being sold
What types of warrandice are there?
There are three types of warrandice that a seller can grant a buyer of heritable property in Scotland.
Simple warrandice
Simple warrandice is a guarantee that the seller will not take any actions in future that would have a negative effect on the title being sold. It offers no guarantees about past actions by the granter or any third party.
Fact and deed warrandice
Fact and deed warrandice is a guarantee that protects the buyer against losses arising from any past of future action taken by the seller which negatively affects the title being sold. It offers no guarantees about past or future actions by third parties.
Absolute warrandice
Absolute warrandice is a guarantee that protects the buyer against losses arising from any past of future action taken by the seller or any third party which negatively affects the title being sold.
What are the limitations of warrandice?
The personal guarantee of Absolute warrandice obliges the seller to make good on any losses arising from their or others actions in the past or the future. This sounds like if offers the buyer a very strong protection. However, two things should be remembered with respect to warrandice.
- It is a personal guarantee, so it is only as good as the seller’s ability to make good on any compensation owed to you. It will be of little value of the seller is bankrupt (or insolvent, if the seller is a company)
- It only offers the buyers means to obtain compensations for any errors, omissions or actions by the seller. It does not provide the buyer with any means to amend or correct the underlying title. So if, for example, you were sold a property with an undisclosed burden or servitude, the warrandice would allow you to claim compensation from the seller, but it would not give you a means to remove the newly discovered burden.
It should be noted that there may be less risk when buying a property that is already on the land register, as the Registers of Scotland provide a warranty as to the accuracy of title sheet as well as a ‘state guarantee of title’ under the Land Registration etc. (Scotland) Act 2012
What if the disposition I’ve received doesn’t mention warrandice?
Warrandice is typically included in the disposition (the legal document transferring ownership of the property). Your solicitor will usually check for it and explain its implications. However, warrandice does not need to be explicitly stated in the disposition to apply. According to the law society,
“Warrandice is implied into all dispositions. If you do not deal with warrandice in the disposition, absolute warrandice will be implied if a disposition is for full consideration; fact and deed warrandice will be implied if the disposition is for an undervalue (though how to prove transfer at an undervalue is a trickier matter); and simple warrandice will be implied if the disposition is gratuitous.”
“Equally, if you fail to specify the degree of warrandice granted (e.g. the disposition states “I grant warrandice”) then absolute warrandice is assumed.”
In summary
Warrandice is a promise from the seller that they’re handing over the property without any hidden issues. If they break this promise, you have legal avenues to seek compensation or resolution. It’s one of the mechanisms in Scottish law designed to make the property buying process more transparent and secure.