Property Deed vs. Title: Differences Explained
Those who hold title to a property do not own anything beyond what the owner has parsed to them. A deed verifies that the owner came into legal possession of their property, similar to a receipt.
Deeds and titles are colloquially considered extensions of each other, often leading to their conflation. The two terms in real estate are very closely oriented, but each retains unique aspects. Those specialized facets divide them in the eyes of the law and state legislature.
What is a Title?
A title is a legal term and a concept where a person owns something. This can be thought about as the "entitlement" that someone claims over objects and property.
Titles also allow you to transfer or sell the interest that you own. In this way, titles are a concept of ownership, but they also have weight in court.
For example, consider the house of two recent divorcées. Neither may have interest in it, though they are entitled to it. Further, they are not entitled to any more than what the divorce settlement has concluded. One partner may keep their grill, but they have no claim to the hobby materials of their ex-partner.
What is a Deed?
In contrast, a deed is a physical document that details the "real" owner of something. Titles do not physically exist—outside of a property's abstract of titles. This dictates all times a property has changed hands.
Deeds describe the ultimate owner of something. They are the legal document needed to transfer the ownership of something to another person.
When thinking about a deed vs. title, it is helpful to think about deeds being a set of dinnerware at a restaurant. Titles are the food purchased, while deeds are the dinnerware and utensils used to manipulate the food. This is similar to how titles are transferred and navigated by deeds.
There are Many Types of Deeds
Along with the benefit of physically existing, there are also many different types of deeds. There are not many types of titles since you are either entitled to a piece of property or not.
There are different types of deeds because of the various circumstances that can occur during an owner's life. Consider these common types of deeds:
- General warranty deeds: new and experienced homeowners know this one. This deed offers the most grantee (buyer or receiver) protection possible. A grantor (seller or giver) obtains these to inhibit anyone else looking to claim rights over a property.
- Covenant warranty deeds: these deeds are similar to a general warranty, with an exception. These verify that an owner has rights to a property, but only once they begin to own the home. This is important if the house has had prior liens.
- Mortgage deeds: refer to the document signed by the homeowner and their bank. It states that the owner has taken out a loan with the bank and explains the consequences of not repaying that loan. This can include defaulting, foreclosure, or legal issues.
- Grant deeds: grant deeds stake a claim that the owner has a clear title. They do not promise that others will not also try to claim the house or property. Additionally, owners with grant deeds may not include a warranty to defend their property from other claims.
- Quitclaim deeds: these offer the least amount of grantee protection and typically don't involve money. For that reason, many people use these to "pass on" property to children or correct errors in more powerful deeds. These deeds transfer the rights of a property to a grantee but don't promise recourse if the deed owner sells.
- Deeds of Trust: used in home loans and signed by three parties; these deeds give security to the bank if a borrower defaults on their loan payments. In other words, the borrower gives the legal title of the property to the lender in exchange for a loan.
- Bargain and sale deeds: consider these deeds as selling a property or house "as is." This means that the buyer purchases the property along with all of the problems that come with it. Unclear claims of title, liens, and other issues become the new owner's responsibility to correct.
Rights of Title vs. Deed
If the concepts remain unclear, consider those rights given to a homeowner. Titleholders are given the authority of a homeowner without owning the entire property. In comparison, deeds are the full-fledged owner—who has dominion over whatever has not been parsed to titleholders.
Here are some of the most well-known rights that both deed holders and titleholders have:
- Right of possession: the owner of something has a right to possess it legally. This right is negated in the event of illegal possession.
- Right of control: the owner of something has the right to control what happens in it and to it. This right stops at another person's boundary violation.
- Right of enjoyment: the owner of something has the right to enjoy their property in any legal way. This right stops when others or their property become endangered.
- Right of exclusion: the owner of something has a right to refuse entry of any person or entity. This right is negated when following court proceedings or subpoenas.
- Right of quiet environment: this is not the right to a quiet Sunday. A property owner has the right not to have nearby institutions polluting the local environment. Civil suits can be filed against the offenders of this right.
- Right of disposition: the owner of something has a right to sell or transfer ownership to a new party. No titleholder may infringe on a deed holder and vis versa. Under ownership, a person may release their interest in something at any time.
It's Important to Understand the Difference Between a Title and a Deed
The distinction between title vs. deed is a thin but vital one. Titleholders enjoy the rights that a deed holder has by virtue of ownership. While deed holders are the ultimate owner of a thing—their name is on the physical document.
When it comes time to consider ownership regarding a house title vs. deed or property title vs. deed, look for professional assistance. Transferring ownership of anything can be intimidating; professionals will help make it easy.