A deed is a legal document which transfers ownership of a home, or a piece of property, from one person to another. The physical deed document will generally describe, in writing, the exact location and description of the property. Additionally, it will include the names of the former owners of the property, as well as the names of the new owners.
There are many different types of deeds that could be used to transfer the ownership property from one person to another. However, all deeds must be signed by the person who is transferring the property to the new owner. Additionally, the signature must be notarized in order to prove that the ownership transfer is valid.
A deed of title, or title deed, is a different, specific legal document that transfers the title of real estate from one person to another. Full ownership of a piece of real estate is given to the new owner. Generally speaking, such a transfer would happen through a traditional real estate sale; however, titles may be transferred in other ways. An example of this would be when someone gives a piece of property to another person as a gift, such as through a will or trust.
In the majority of cases, the deed of title is classified as a general warranty deed. This is a specific type of deed in which the current owner guarantees that they hold a clear title to a piece of real estate. What this means is that they are guaranteeing that they received a clear title from the previous owner of the property, and that no other individuals retain any interest in the property.
A general warranty deed, or a grant deed in some states, is used for most real estate deed transfers. It is important to note that deeds of title should not be confused with a deed of trust. A deed of trust simply grants a lender or mortgage lender a lien on the property if a debt is owed.
What Is The Difference Between A Deed And A Title?
The actual deed itself, and having title to a piece of property, are two different concepts. A deed is the actual, physical, legal instrument or written document conveying the ownership of property from one person to another. When you are buying a home, you will be signing the deed to the home. This is what creates your right to claim ownership of that house.
Alternatively, title refers to a legal relationship between a person and the land that they own. This relationship creates a right to that specific piece of property. An example of this would be getting a loan from a bank in order to purchase a piece of property. The bank will hold title to the property until the loan has been paid off, in full, at which point the bank will transfer the title to the property to the borrower.
What Is An Abstract Title?
In real estate terms, an abstract of title is a document that details the transaction history and any proceedings relating to a specific property. Because the legal history of a property is considered to be one of its most important elements, it is a powerful tool for those interested in purchasing a piece of real property.
When buying real estate, you will need to know about any potential problems associated with the property prior to finalizing the sale. An example of this would be how if there are liens on a home, you need to know what they are and how much is owed. Additionally, you will want to avoid survey issues.
An abstract of title will show all types of transactions that were recorded at the county courthouse for the property in question. Anything that is on record at the courthouse will be included on the abstract. By purchasing title insurance, which will be further discussed below, you can protect yourself from anything that was not recorded.
It is important to have an experienced attorney read the abstract, and make notes regarding potential issues. You should not sign anything until your lawyer has reviewed the abstract.
What Does An Abstract Title Generally Contain?
Generally speaking, an abstract of title will include records of occurrences such as:
- Wills;
- Conveyances;
- Grants;
- Liens;
- Tax liens;
- Homeowner association (“HOA”) liens;
- Encumbrances;
- Deeds;
- Mortgages;
- Litigation;
- Tax sales;
- Surveys and notes; and
- Easements.
In order to keep the abstract document manageable with such a large quantity of information, only what is considered to be the most important information regarding the property will be pulled from the documents and prepared.
The condensed, or abstract of all the important pieces of information will generally summarize:
- The original grant;
- Subsequent changes in ownership;
- Whether there are any encumbrances; and
- A statement on its accuracy, which is put forth by the individual who prepared the abstract.
What Is A Marketable Title?
To reiterate, a title serves as legal evidence of ownership. When one party sells a piece of real estate to another party, the title is transferred to the new owner. A marketable title is generally, reasonably free of defects and liens. As such, it is unlikely to be the subject of a lawsuit.
Alternatively, an unmarketable title to a piece of land may have issues such as:
- Mortgages;
- Encumbrances on the land;
- Zoning law violations; and/or
- Problems associated with obtaining the land through adverse possession.
Before purchasing a parcel of land, ensure that you have evidence of a good, marketable title. Having solid evidence can prevent an outside party from attempting to make any claims on your new purchase. Some examples of evidence of a marketable title include:
- An abstract of title;
- A certificate of title;
- A title insurance policy; and/or
- A warranty of title.
These records and documents can identify relevant information regarding the history of your property. The factual basis of such records come from the examination of a real estate attorney of property records.
Title insurance can help protect a property owner from potential risks associated with the title. An example of this would be how errors or omissions in the property title could create a liability for monetary damages, resulting from liens or other issues. Title insurance can shield property buyers from land or real estate transactions involving defective or unmarketable titles.
It is imperative to perform a thorough title search before purchasing any property. A title search involves reviewing files from the county records department to see a particular property title’s ownership history. The search is generally conducted by a commercial agent, such as a title company, a real estate attorney, or an escrow officer. The purpose of a title search is to confirm that the seller is the actual, legal owner of the property that is being sold.
Also, the search helps to ensure that the title is not clouded by a defect that could reduce the value of the land. Additionally, if a buyer has title insurance, the agent conducting the search must determine whether the title insurance company will insure the title as part of the search process.
Do I Need An Attorney For Issues With Abstract Title?
If you are considering purchasing a piece of property and have questions associated with abstract title, you should consult with an experienced and local real estate attorney. A local lawyer will be familiar with your locality’s process for title searches, and can also represent you in court as needed should you experience any issues. Your attorney can also review any documents you are provided with, before you sign them.
