Real Estate

Differentiating Between a Certificate of Title and a Deed

Differentiating Between a Certificate of Title and a Deed

Both deeds and certificates of title serve a common purpose, which is to serve as evidence of property ownership. The certificate of title must have enough data to identify the property as well as any liabilities or financial burdens, such as mortgages. While the deed to a piece of real estate, on the other hand, may include ownership constraints as well as additional information about the property.

What does a Certificate of Title Mean?

A certificate of title is a state-issued document that establishes ownership of the real estate and both real property (land) and personal property (items) can be covered by a certificate of title (possessions). The certificate usually includes the name of the property owner, his address, as well as other relevant data such as the address or location of the property.

However, whatever encumbrances are attached to the property must be listed on the certificate, in a bid to be transparent and upfront with the buyer.

Uses of Title Insurance

Certificates of title are particularly crucial in real estate transactions because it expresses the business’s belief that the seller is the rightful owner of the property. One clear point is that determining the clear owner of land may be complicated, so to demystify this the certificate of title is awarded by the company, after verifying the seller’s claim of legitimate ownership through a series of background checks.

The Purpose of the Deed

The sole purpose of a deed is to transfer property from one party to the other. It includes the property’s location or other distinguishing qualities, as well as the official names of the two parties to the transfer.

The deed historically included any commitments made by the buyer and seller as part of the transfer, such as the purchase price and any limits on the property’s usage. However, nowadays the additional details are incorporated on another contract of sale which will be attached to the main document.

Administering a Deed

Exchanging ownership of a property with a deed stating the name of the buyer is merely the first step. It must be legally delivered to the buyer, which indicates the deed takes effect immediately.

Most courts will acknowledge delivery if the seller merely transfers the deed to the buyer, but a court can find failed delivery and annul the deed if one party shows proof that the deed was not meant to go into effect immediately and forever. The majority of parties now handle this through the trust process, in which the deed is sent to a third-party agent with instructions to deliver it to the buyer after all of the selling conditions are completed.

The Author

Ajisebutu Doyinsola

Doyinsola Ajisebutu is a journalist and prolific writer who takes a special interest in Finance, Insurance, and the Tech world.