When it comes to owning property, two terms that you might come across are "title" and "deed." These terms are often used interchangeably, but they actually refer to different aspects of property ownership. In this article, we will delve into the basics of a title versus a deed, what they are, and how they relate to property ownership.

What is a Title?

A title is a claim to several rights related to property, including the right to own, control and use that property. The title incorporates all prior transfers and usage of the property or land.

To check the history of your title, a title company or attorney would need to be hired to facilitate the property ownership transfer. They will perform or have a searcher complete a title search. A title search will identify if there are any concerns with ownership, including making sure the seller truly has the authority to transfer the title or if there are other claims to it. They'll also check if there are any judgments or liens against the property as a result of a previous owner's unpaid debts. They will work to clear title prior to ownership transfer so that they can issue an insurance policy against the title.

This insurance policy is called an owner’s title policy. This one time policy is for the life of your ownership of the property and it protects you against any fallout or past title issues that were not found on the title search. If you borrow money from a bank, the mortgage lender will require you to get a lender’s title policy to protect the lender from issues relating to the loan.

What IS a Deed?

A deed is a physical document that proves ownership. It transfers ownership of a property from one party to another. It includes the names of the buyer and seller, a legal description of the property, and any relevant terms or conditions of the sale.

There are different types of deeds, each with its own legal implications. Some common types of deeds include:

1. General Warranty Deed - This type of deed provides the most protection to the buyer. It guarantees that the seller owns the property and has the right to sell it, and it also guarantees that the property is free from any liens or encumbrances. If any issues arise with the title, the seller is responsible for resolving them.

2. Special Warranty Deed - This type of deed provides less protection to the buyer than a general warranty deed. It only guarantees that the seller has not done anything to harm the title during their ownership of the property.

3. Quitclaim Deed - This type of deed provides no guarantees or protections to the buyer. It simply transfers the seller's interest in the property to the buyer, without any warranties or promises.

It's important to understand the type of deed that you are receiving when purchasing a property, prior to purchase.

How They Relate to Property Ownership

To own a home you need both a deed and a tile. The deed is the document that transfers title. When your name is on a home's deed, you also take on title, or the abstract idea that you own the property and have certain rights to it.

The deed will need to be recorded with the local government agency responsible for maintaining property records, such as the county recorder's office. Once the deed is recorded, you will become the legal owner of the property.

It's important to note that owning a property does not necessarily mean that you have a clear title. Clear title is one that is free from any liens or encumbrances, which can include mortgages, judgments, and other legal issues. Without clear title you may be unable to sell or transfer ownership of the property in the future.

If you want to learn more about deed and title transfer services, my rockstar team at Steel Abstract is happy to provide assistance. Please consider them for all your property ownership needs!