“Title” and “deed” are terms used in real estate that are generally associated with buying and/or selling a home. When a seller, also known as a grantor, transfers ownership of a home to a buyer, also known as a grantee, both the deed and the title of the home are transferred to the grantee.
Although the two terms are often thought of as interchangeable, they are actually two separate real estate terms. The title of a property refers to the legal rights that an owner has over their own property. Title rights include, but are not limited to:
- Providing the owner with access to their property;
- Allowing the owner to sell or transfer the property to other parties;
- Enabling the property owner to enjoy and use their property in any legal way they see fit.
In other words, a title is a legal right to ownership of a property, with the legal purchase of a house serving to transfer the title to the buyer.
On the other hand, a “deed” is the actual written legal document that transfers the title rights from one party to another. In other words, 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.
The deed will be handed over to the buyer, or grantee, at the closing sale. Once a deed has been turned over to the grantee, 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 will always contain a description of the property, including property lines. Additionally, a deed will also provide information about the seller/grantor and the buyer/grantee. Generally, this information includes the parties’ full names and their addresses. Both parties must sign the deed document in order to make the deed official.
As can be seen, the defining difference between a deed and a title would be the physical component. Once again, a deed is an official written document that states a person’s legal ownership of a property, whereas a title actually refers to the concept of ownership rights.
Are There Different Forms of Real Estate Title?
In short, yes, there are four different types of titles in real estate. The difference between the different forms of real estate titles is generally 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, the title 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: “Fee simple absolute” is a real estate title term that refers to an interest in property a person will receive when they buy land or receive land as a gift.
- The interest is considered to be an absolute interest because the interest will not end due to an event or condition. As such, a holder of the title in fee simple absolute has complete and full possessory rights to the property.
- A fee simple absolute title right applies both at the present and in the future and for an infinite amount of time. Further, 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.
- A fee simple title holder 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 of 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.
- Although 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 the joint ownership of property by a husband and a wife, who are treated as a single entity.
- In a tenancy in the entirety setup, both spouses are able to possess and use all of the property. Then, when one spouse dies, the other inherits the whole property.
- It is important to note that neither spouse is allowed to sell any part of the property without the other spouse’s consent.
- Tenancy in the entirety is commonly connected with marriage, as it can only be created by a married couple.
- Although tenancy in the entirety is similar to a joint tenancy, the exception is that the right of survivorship cannot be destroyed.
- Many states have abolished this form of title and prefer that married couples assume a joint tenancy with right of survivorship.
There are some states that presume that a transfer of a single property to several parties is considered to be a tenancy in common, with no right of survivorship. As such, in those states, the parties must expressly state a right of survivorship in order for the title to become a joint tenancy.
What Does the Form of Title Affect?
The form of real estate title can affect several different aspects of property ownership. The most important of these aspects would be the transferability of property. Transferability of property refers to the title holder’s ability, granted under law, to transfer all or parts of their property to another person.
For example, the holder of a title in fee simple can transfer their entire property to another person without any restriction. However, title holders in a tenancy in common will be restricted in terms of how they can transfer their property.
Further, 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, title holders cannot transfer another tenant’s share without the other tenant’s permission to do so.
It is important to note that the laws that govern real estate titles vary considerably from state to state, as well as based on the type of property involved. As such, each state may vary in terms of how titles are acquired. Thus, it is important to research local property laws in order to determine how the different forms of title may affect property rights.
What Is a Title Search?
A title search is an act that involves reviewing files from the county records department in order to see a property title’s ownership history. Title searches are generally conducted by a commercial agent, such as a title company, a real estate attorney, or an escrow officer.
The types of records that a title search may reveal include, but may not be limited to:
- Deeds;
- Court records;
- Name indexes;
- Property indexes.
A title search is generally intended to confirm that the seller of the property 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 against neighboring property owners or other property owners.
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 the property;
- There are pending probate issues regarding the property;
- The home is part of a foreclosure action;
- The title to the property is fraudulent or forged;
- There are defects or errors in the chain of title.
Importantly, if a buyer has title insurance, the agent who is conducting the title search will need to determine whether or not the title insurance company will insure the title as part of the title search process.
Do I Need an Attorney For Assistance With Forms Of Real Estate Title?
If you are buying or selling a home or have any questions concerning the different forms of real estate title, it is in your best interests to consult with an experienced real estate lawyer.
An experienced real estate attorney will be most familiar with your state’s laws regarding real estate titles and can help guide you. Additionally, an experienced real estate attorney will also be able to represent you in court, as needed, should any legal issues or disputes arise that require a court’s attention.
