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When buying a new home, you’ll quickly hear all sorts of terms tossed into conversations. Most people tend to assume that Property Deeds and titles are the same, but in reality refer to two separate legal concepts. When you own a property entirely, you will possess both the Deed and title. But a title is distinct from a Deed. Mixing the two up can cause problems if you don’t know what you’re using.
Deeds are simply the legal documents that transfer title from one entity to another, not titles themselves. They must be written documents, according to the Statute of Frauds. Another term for “deed” is “vehicle of the property interest transfer.” In most states, deeds are required to be recorded in a courthouse or an assessor’s office to make them fully binding, but a failure to file them does not change the transfer of title. It just means that the deed is not “perfected.” An imperfect deed does not mean that there is a problem with the title. It’s just a problem with the way that the paperwork surrounding the deed was handled.
A Title is a legal way of saying you own a right to something. When buying a home, the title refers to ownership of the property, and you have the rights to use that property. It may be a partial interest in the property or it may be full. However, because you have a title, you can access the land and potentially modify it as you see fit. A Title also means that you can transfer that interest or portion that you own to others.
The Bottom Line: Deeds and certificates of title have one function in common: both provide proof of ownership of property. The certificate of title must contain enough information to identify the piece of property and any encumbrances, such as mortgages. The deed to a piece of property may also include conditions of ownership and more extensive information about the property. The deed itself is also an integral part of a real estate transfer.
