Title or Deed: Which One Do You Need?

You’ve been working for months on that complex real estate transaction, and it’s finally coming together. Just a little paperwork left to be completed, and you’ll be ready to receive the deed. Or wait—is it the title? Most of the public uses the two terms interchangeably, and in the public mind both words represent the same general concept: proof of ownership of a property. But in legal terms, “deed” and “title” have quite different meanings; and if you have any hope of making sense out of a real estate deal, you need to understand the distinction.

Titles vs. Deeds

When you own a property completely, it’s true that you will possess both the title and the deed. But there’s only one of those things that you can file away in a file cabinet. “A deed is a legal document used to confirm or convey the ownership rights to a property,” Anne Rizzo of Title Source Title Clearance told Realtor.com. “It must be a physical document signed by both the buyer and the seller.” In contrast, a title is not a physical document, but rather a concept. It’s a legal term that means you have the ownership of and right to use a property. Therefore the deed is the physical document (or “instrument”) that transfers the title from one party to another. A deed must state on its face that it is a deed, accurately describe the property being transferred, be validly signed (executed) in presence of witnesses, and be delivered by the seller (grantor) to the buyer (grantee).

Different Deeds for Differing Needs

Beyond those general requirements, there are three distinct types of deeds. A general warranty deed is useful when a commercial or residential property is transferred between parties who may be unrelated to or unfamiliar with each other. The transfer of ownership in a general warranty deed carries guarantees against future problems or claims, serving as a safeguard against fraud.

A general warranty deed guarantees:

  • The grantor owns the property and has the right to sell it.
  • The property has not already been sold.
  • No liens, debts, or other claims exist against the property besides those that may already be described in the deed.
  • The grantor is responsible for any problems with or claims against the property.
A special warranty deed differs from a general warranty deed in the extent of the coverage of the warranty. Whereas a general warranty deed offers the above guarantees for the entire history of the property, a special warranty deed makes those guarantees only for the duration of the grantor’s ownership of the property. In other words, the grantor is not responsible for any problems or claims against the property that date to before the grantor’s ownership of the property. A quitclaim deed (or non-warranty deed) is a useful instrument for transferring properties between two trusted parties, such as family members. The quitclaim deed, like the warranty deeds, also conveys the grantor’s title, interest, or claim to a piece of property to the grantee. However, a quitclaim deed does not make the same guarantees that either of the warranty deeds do. There is no guarantee of the validity of the grantor’s title, interest, or claim—therefore, the quitclaim deed does not guarantee the grantee from title disputes. Because they are simpler than warranty deeds, quitclaim deeds are often used to transfer property between family members or when no money is changing hands. However, they are not appropriate for all property transactions and can leave the grantee extremely vulnerable in certain situations. Whichever deed fits a given situation best, a qualified Maryland real estate attorney can be invaluable in smoothing the way to a seamless and profitable property transaction. Lusk Law, LLC, offers expertise in Maryland property law and years of experience helping parties on both sides of real estate transactions. Contact Lusk Law for a consultation to learn how they can help you.