Even though you have both a title and a deed when you own both the property and the home that’s on it, they are actually two different things. Knowing the difference between a title and deed is instrumental in making savvy property purchases and knowing your options when you want to remodel your home, expand your property, sell your land, or do anything else that requires your ownership and documentation.
This is a short guide to the difference between a title and a deed, including when you get them and what you should do with them.
What is a title?
A title in legal terms is how you know you own a property. Holding the title means you own the rights to use the property, even if you only have a partial interest in it.
With a title, you can make changes to the landscape, access everything that’s on the property, and otherwise make management decisions about how the land is used and who can take advantage of it.
The titleholder can transfer a home title or land title to someone else, either partially or in full. This happens when people collaborate in a joint business venture and want to share the use of a property or when an owner wants to turn their property into an inheritance in order to transfer the title to an inheritor.
You can only transfer the aspects that you own, however, in the amount that you own them. Someone with a partial title on a piece of land cannot transfer the whole property to a receiver. It may sound logical that you couldn’t do this, but you may be surprised how often people try it.
What is a deed?
A deed is a document as opposed to a title, which is a legal right. A property deed is written down and recorded to transfer titles between people. This is both for full transfers (as in an inheritance) and for partial transfers, as in a new business venture.
Deeds are official documents that have to follow the Statute of Frauds and must be recorded at an assessor’s office or courthouse. They are not binding documents in most states without this authorization.
Another term also comes up in legal disputes over house titles and property deeds all the time in issues of deeds. It’s what’s called an “imperfect deed.”
An imperfect deed is a deed that was authorized correctly but not filed right (or at all). A deed’s imperfection does not change the legality of the title itself: those who received the property transfer are still the new owners (so long as the authorization was legal). All an imperfect deed affects is the deed itself and the paperwork’s representation of the transaction.
The titles are not affected, so the property transfer can still be performed. However, if there’s a legal dispute down the road, an imperfect deed can raise the transactions into question and prove inconvenient for a later settlement.
Types of deeds
Though a title is a legal right and refers to ownership, as a document, deeds come in several varieties.
Some are blanket transfers without many amendments, and some contain many stipulations as to the recipient and use of the transferred title. Quitclaim deeds are used for more straightforward transfers between people who know each other, such as family members who are all on good terms.
A quitclaim deed is a type of deed that is generally used when a property is transferred between parties that know each other, like family members. Quitclaim deeds are not the most airtight documents and don't provide any guarantees that the grantor owns the property outright. You wouldn't want a quitclaim deed if you're purchasing a home from an unknown party. However, since the parties involved know each other, a quitclaim deed, which can be used to make the transfer quickly and easily, is a viable option.
Warranty deeds are pretty much what they sound like. The owner of the property title sells the deed to a buyer with the warranty deed written up as the buyer’s assurance that the seller holds the title, free and clear. If there are any discrepancies in the property's ownership the seller warrants to do whatever is necessary to make good on the buyer's title to the property. Warranty deeds provide buyers with the most protection. Regardless, to protect against any potential claims, title insurance is used in most transactions involving warranty deeds.
There are other types of deeds drawn up for situations that arise in each particular deal. Knowing the main differences between them can help you navigate your options when you’re trying to buy or sell a property.
When do I get the title to my house?
If you’re the new owner of a house, you may be wondering when you get your title. This is likely because you’re still confusing the differences between title versus a deed since the deed is the written document that you need to “get” when you become the owner of a property.
The title is simply something that you “have” already; it is your right to control, own, and use the property in question however you want, so long as it’s legal. This includes everything from playing ball in your yard to telling people to get out of your house. What you will get, however, is the property deed.
Abstract of Title
There is something called an “abstract of title”. An abstract of title is a document that summarizes who has owned your property in the past, a list which now includes you. This document is essentially a summary of all past changes in ownership and also includes details on encumbrances on the property, such as mortgages. Nonetheless, it's still not something you are likely to psychically “get”, even though it will likely be used by the title insurance company.
Does a deed mean you own the house?
While you get a deed when you purchase your home, it doesn't mean you own the property outright. For example, you'll still receive a deed to your house if you're financing the property with a mortgage.
Knowing the difference between a title and deed can better prepare you for property ownership. It lets you know the documents you will receive (deed) and the legal status you will attain by owning a property (title).
Deeds are documents of transfer that dictate the new property owners and give the house titles to new recipients. Titles are merely legal statuses.
By learning the difference, you know what you’re “getting” when you buy or inherit a house. In the case of a partial transfer, you will know what rights the other parties have and what restrictions are in place on your use of the property.
To avoid legal trouble later, learn the difference between a title and a deed so you know what you can and cannot do on your own land.