The terms “title” and “deed” are generally associated with buying and/or selling a home. When a seller (or grantor) transfers ownership of a home to a buyer (or grantee), both the deed and the title transfer. Although the two terms are often thought to be interchangeable, they are actually two separate things.
“Title” to property refers to the legal rights that an owner has over their own property. Title rights:
- Provide the owner with access to the property;
- Allow the owner to sell or transfer the property to other parties; and
- Enables the property owner to enjoy and use the property in any legal way they see fit.
A title is a legal right to ownership of a property, and the legal purchase of a house transfers the title to the buyer.
Alternatively, the “deed” is the actual written legal document which transfers the title rights. To put it another way, when one party wants to sell or transfer the title to their property to another party, they must create a deed in order to do so. This deed will be handed over to the buyer at the closing sale. Once a deed has been turned over, the new deed holder should immediately file the document with the office of the county clerk in which the land or real estate is located.
A property deed contains a description of the property, including property lines. Additionally, a deed provides information about the seller/grantor and the buyer/grantee. Both parties must sign the deed document in order to make it official.
To further expand, the defining difference between a deed and a title would be the physical component. While a deed is an official written document which states a person’s legal ownership of a property, a title actually refers to the concept of ownership rights.
Are There Different Forms Of Real Estate Title?
There are four different forms of real estate titles. The difference between these forms is overall associated with whether only one person possesses the property, or whether the property is shared among multiple people. If the title is split between more than one person, possession is generally referred to as “joint possession” of the property.
The four different forms of basic real estate titles are as follows:
- Fee Simple: A “fee simple absolute” refers to when someone else “owns” something, and is the most common form of real estate title. Generally speaking, this is an interest in property a person will receive when they buy land, or receive land as a gift. The interest is considered to be absolute because the interest will not end due to an event or condition. A holder of title in fee simple absolute has complete, full possessory rights to the property.
- This right applies both at the present and in the future, and for an infinite amount of time. There are generally no limitations associated with the inheritability of the property, which means that the holder in fee simple can sell their property in full or in part. They may also transfer the property by will at the time of their death;
- Joint Tenancy: Under a joint tenancy title, there are two or more owners who hold an undivided share in the property. Joint tenancy generally implies a right of survivorship, which means that if one joint owner dies, the surviving owners retain their undivided share of the property. While state laws differ, some states require joint tenants to expressly state whether a right of survivorship exists;
- Tenancy In Common: Each individual owner of the property also has an undivided interest in the property. However, there is no right of survivorship. Additionally, each person holds a proportionate interest in the estate, which passes on according to state succession laws. A tenancy in common is one of the most favored forms of joint possession; and
- Tenancy In The Entirety: Tenancy in the entirety refers to joint ownership of property by a husband and a wife, who are treated as a single entity. Both spouses are able to possess and use all of the property. When one spouse dies, the other inherits the whole property. Neither spouse is allowed to sell any part of the property without the other spouse’s consent.
- This specific form of real estate title is connected with marriage, as it can only be created by a husband and wife. Although it is similar to a joint tenancy, the exception is that the right of survivorship cannot be destroyed. It is important to note that many states have abolished this form of title, and prefer that married couples assume a joint tenancy with right of survivorship.
Some states presume that a transfer of a single property to several parties is considered to be a tenancy in common, with no right of survivorship. Only when the parties expressly state a right of survivorship would the title become a joint tenancy.
What Does The Form Of Title Affect?
The specific form of real estate title can affect several different aspects of the property ownership. The most important of these aspects would be transferability. Transferability of property refers to the title holder’s ability, granted under law, to transfer all or parts of the property to another person.
An example of this would be how the holder of a title in fee simple can transfer their entire property to another person without restriction. However, title holders in a tenancy in common will be restricted in terms of property transfers. Depending on the laws of the jurisdiction in which the property is located, the title holders may not be able to transfer their share of the property to another person. Additionally, they cannot transfer another tenant’s share without the other tenant’s permission to do so.
The laws which govern real estate titles vary considerably from state to state, as well as based on the type of property involved. Additionally, each state may vary in terms of how titles are acquired. You should research your local property laws in order to determine how the different forms of title affect property rights.
What Is A Title Search?
A title search involves reviewing files from the county records department in order to see a property title’s ownership history. Such a search is generally conducted by a commercial agent, such as a title company, a real estate attorney, or an escrow officer.
The types of records that such agents would inspect include, but may not be limited to:
- Court records;
- Name indexes; and
- Property indexes.
A title search is generally intended to confirm that the seller is the actual legal owner of the property that is being sold. A title search also helps to ensure that the title is not clouded by a defect, which could reduce the value of the land or potentially subject the buyer to some sort of legal liability.
Some examples of factors that could cause a title defect include, but may not be limited to:
- The property has a mortgage lien or unreleased lien attached to it;
- Pending probate issues regarding the property;
- A home is part of a foreclosure action;
- The title to the property is fraudulent or forged; and
- Defects or errors in the chain of title.
Additionally, if a buyer has title insurance, the agent who is conducting the title search will need to determine whether the title insurance company will insure the title as part of the search process.
Do I Need An Attorney For Assistance With Forms Of Real Estate Title?
If you are buying or selling a home and have questions regarding forms of real estate title, a real estate attorney can assist in the process.
A local lawyer will be most aware of your state’s specific laws regarding the matter, and will also be able to represent you in court, as needed, should any issues arise.