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Title Vs. Deed - What is the difference?

Two common terms you hear when buying a home are Title and Deed. What is the difference?

Simply, Title refers to the bundle of rights associated with the ownership of a piece of property and Deed refers to the document that proves ownership.

There are four types of Deeds:

General Warranty Deed - Provides the greatest protection to the buyer because the seller is legally bound to certain covenants or warranties. These warranties include:

Covenant of Seisin – Seller warrants that they have the right to sell the property.

Covenant Against Encumbrances – Seller guarantees that the property is free of any and all liens except as stated in the deed.

Covenant of Quiet Enjoyment – Seller guarantees that the title is good against any party that might attempt to establish a superior title.

Covenant of Further Assurance – Seller promises to obtain and/or deliver all things necessary to provide clear title.

Covenant of Warranty Forever – Seller promises to compensate the buyer for any loss sustained if the title fails.

Special Warranty Deed – Deed that contains only two basic warranties.

The seller received the title

The property was not encumbered during the time in which the seller owned the property, except as noted in the deed.

Seller is essentially only taking responsibility for the time in which they owned the property. This is the deed in which is commonly used when purchasing and REO from a bank.

Quit Claim Deed – Provides no warranties and only conveys whatever interest the seller may have at the time the deed is delivered.

Specialized Deeds – Trustee Deeds and Personal Representative Deeds are commonly used in Florida. The names actually refer to the person executing the deed not the deed type. These deeds can be

General Warranty Deeds, Special Warranty Deeds, or Quit Claim Deeds.

There are two types of Title:

Legal Title – Ownership of property that is enforceable in a court of law.

Equitable Title – Provides for the actual enjoyment and use of a property without absolute ownership.

There are four ways to take title:

Sole Ownership – Property taken is one’s own name. Typically used by non-married or legally divorced person who wishes to hold title in his or her name.

Joint Tenancy w/ Rights of Survivorship– Two or more parties own a property with each party’s rights of possession being equal to their respective ownership shares. In the case of the death of an owner that owner’s shares are automatically distributed to the other parties.

Tenant in Common – Joint owners have right sell, lease, or bequeath their interest in the property to their legal heirs.

Tenancy by the Entirety – Used for married couples that wish to hold joint title in the name of both parties.

Knowledge truly is power. Learn more and earn more… Happy investing.

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