Which type of deed is often used by banks and railroads?

Minnesota Limited Warranty Deeds are often utilized by banks and railroads primarily because they provide a balanced level of protection for the buyer while reducing the liability for the seller. This type of deed guarantees that the seller holds title to the property and has the right to transfer it, but it only warrants against claims or defects that arose during the time the seller owned the property.

In situations where banks or railroads are transferring properties, such as in foreclosures or other transactions, they may not be able to provide full warranties for the entirety of the property's history. This is where the limited warranty deed becomes advantageous; it protects the buyer from issues that may have occurred under the seller's ownership while not covering defects from previous owners.

This assurance can be crucial in real estate transactions where the seller is a financial institution or a large entity that may have limited knowledge of the property's past. Thus, this type of deed strikes an appropriate balance for institutional sellers, making it a preferred choice in these scenarios.