At first glance, deeds and titles seem like the same thing. Both have something to do with the concept of ownership, but if you are unfamiliar with real estate, the difference will likely be lost on you.
However, if you’re shopping for a home or looking to sell a house you’ve inherited, you’ll want to straighten out the differences between these two concepts.
Let’s dig in.
How to Conceptualize the Difference Between Deed And Title
The most notable difference between a deed and a title is that one is tangible and the other isn’t. A deed is a physical document that legally represents the ownership of personal property, whether it’s a car or a home. The title is intangible—it is the concept of ownership itself.
Does that sound confusing? Here’s an example that can help clarify the difference—
Can You Hold a Movie?
Think of your favorite movie. What type of media grants you access to that movie? You can stream it, purchase it as a blue-ray disk, or as a digital download. Or, you can purchase a ticket and see it in the theater.
But how do you own that movie? Its ownership is in some way imagined. That’s because a movie is intangible. It’s comprised of a series of ideas transmitted through flashes of light and dialogue.
However, certain media grant you access to it—allow you to experience it. These media are tangible, whether a disk, a stretch of code, or a ticket.
Deeds are like the media that grant you access to property—they are the tangible representations of ownership. Titles are like the movies themselves. They are intangible and cannot be held. Instead, they are experienced through ideas of ownership, much like how films are expressed through ideas.
Now that we’ve had a little lesson in ownership philosophy, we can provide functional definitions of deeds and titles.
What is the Role of a Deed?
A deed is a legal document representing the transfer of property from the seller to the buyer. It is only official after both parties have signed it. Deeds not only contain the signatures of the buyer and seller but also contain a description of the transferred property.
There are three types of deeds that each have slightly different uses:
General Warranty Deed
The general warranty deed protects the buyer by ensuring that the seller is the complete owner of the property, possesses the full title, and has the right to sell. It also discloses that the seller has no knowledge of damage or issues with the property.
Special Warranty Deed
Special warranty deeds are similar to general ones, except for one key difference. The seller only guarantees the intactness of the property for the duration that they owned it. Because of these differences, most commercial deed transfers use special warranty deeds.
Quitclaim deeds are used when the transfer of ownership doesn’t involve an exchange of money. Usually, these are used by business owners who want to transfer property from their possession to their business or LLC. Another use for quitclaim deeds is when a parent transfers property ownership to a relative for free.
What is the Role of a Title?
A title is the ownership itself. It is the legal right to own, use, or sell the property. The deed is a physical representation of the transfer of title. You obtain both the title and the deed when you buy a house.
Planes, Trains, and Automobiles
According to Roni Davis, writer for First National Realty Partners, a nationwide commercial real estate investing company, “Titles aren’t limited to houses and extend to other property types, like boats, cars, airplanes, and RVs, among others.”
What is the Abstract of Title?
The abstract of title is another important document that lists all previous owners of a property and any debts or liens encumbering the ownership of that property. Though the title is intangible, the abstract is like a recorded history of everything that has happened to the title before you owned it.
When you transfer ownership to someone else, you become a part of the title’s history.
What Rights Are Guaranteed By a Title?
As mentioned above, a title grants the owner certain legal rights. Below are the specific rights granted by title ownership.
- Right of Possession
- Right of Control
- Right of Exclusion
- Right of Enjoyment
- Right of Disposition
If a title has more than one owner, these rights are split equally among them.
Now You Know the Difference Between Deeds and Titles
The takeaway is that a deed is the physical representation of ownership and a title is the intangible concept of ownership, including legal rights. Knowing the difference between the two is crucial for buying or selling property.
Roni Davis is a commercial realtor, blogger, and legal assistant operating out of the greater Philadelphia area. She writes for First National Realty Partners, a nationwide commercial real estate investing company.