What Is the Difference Between a Deed & a Title?

Purchase agreement for house
••• AlexRaths/iStock/GettyImages

A deed conveys ownership to real property. The legal document does not, however, automatically guarantee title. Title means a landowner owns a piece of land subject only to liens of record. An attorney or a title company provides a title opinion, or certificate of title, that details any liens affecting the underlying deed. Usually, you receive both a deed and certificate of title when you buy land, but you can have a deed to land and not have a clear title.

TL;DR (Too Long; Didn't Read)

A deed is a document that conveys an interest in real estate from one person to another (or between entities). Title is the state of the ownership - that is, who owns the property and how much of it they own. A deed transfers title in a property to the buyer.

Title and a Warranty Deed

A warranty deed is the preferred document for a buyer of real property. When a seller, or grantor, executes a warranty deed to the buyer, or grantee, he is guaranteeing, or warranting, good title to the property, subject only to any restrictions noted in the deed itself. For example, title may be subject to the right-of-way of the local electric company over the front 10 feet of the property, or the rights and restrictions of a homeowners association. It takes a title search to determine the state of a title conveyed by a warranty deed.

Title and a Quitclaim Deed

A grantor uses a quitclaim deed to transfer to a grantee whatever interest in a piece of real estate the grantor owns. There's no warranty or guarantee of title. A quitclaim deed can be used to extinguish a potential claim by an heir of a previous owner or to correct a mistake in a prior deed. The key feature of a quitclaim deed is the lack of any claim to title. By itself, a quitclaim deed doesn't prove title. If you execute a quitclaim deed to transfer an interest in property to someone else, the property will come with all the mortgages, tax liens, judgment liens and other encumbrances that would normally have to be cleared before a warranty deed could be granted.

Deed and Title Insurance

An attorney or a title company will perform a title search on a property to determines if there are any liens affecting the title. The attorney or title agent then prepares a title opinion or certificate of title. That document is submitted to a title insurance company; the company then issues a policy upon payment of a one-time premium. Title insurance gives the new owner protection for the title and land subject only to any liens found by the attorney in the title search. The title insurance policy, in effect, becomes proof of title.

Read More:What is Title Insurance?

Related Articles