Title and deed are two types of similar documents that are used to convey ownership in real estate. A deed is a document that transfers ownership of something from one person or entity to another. By contrast, a title refers to the legal rights associated with something — such as who has the right to sell it, build on it, etc. These legal instruments serve a similar purpose but offer different benefits when used for different purposes. If you’re buying real estate and you want to know whether you’re looking at a deed or a title, here’s what you need to know:
What is a Title?
A title is a legal way of saying you own a right to something. In real estate, a title is technically proof of legal ownership of a particular property, regardless of the type. Meaning you can rightfully occupy the property and live and use it as you intend. You may own a partial interest in the property, or you may own the whole thing. You can access and modify the property as you see fit as long as you have a title. A title also allows you to transfer that interest or portion you own to others. But you can never legally transfer more than you own.
One of the most crucial elements regarding the title is the bundle of rights. “Bundle of Rights” refers to the buyer’s legal privileges after the completion of the transaction and transferring of the title.
The legal privileges the bundle of rights offers to the buyer are:
- The right of possession: The person who has the title is the legal owner of the property and therefore has obtained the right to occupy and possess it.
- The right of control: The owner has the right to utilize the property. However, entities such as the Homeowners Association (HOA) have the authority to restrict certain usage methods.
- The right of exclusion: The owner has complete control over who can enter the property.
- The right of enjoyment: It allows the legal owner of the property to do whatever they please inside the property as long as it doesn’t violate any laws or rules.
- The right of disposition: The owner can sell, lease, or gift the property to others.
Why is a Clear Title Crucial In BC, Canada?
A clear title is essential for property owners In BC, Canada. A clear title indicates that the property lacks defects such as bankruptcies, judgments, liens, etc. The ownership of a property cannot be transferred without a clear title.
In BC, Canada, no individual can conduct real estate transactions without a clear title. In cases involving mortgage and or financing, the lender needs a clear title to protect the interests of the property.
It is important to proceed with a title search to identify potential problems before closing. During the examination, the title examiner will look for issues such as:
- Bankruptcy filings
- Erroneous surveys
- Foreclosure issues
- Improper title transfer due to past paperwork error
- Liens
- Judgments
- Improperly filed documents
- Probate issues
- Survey and boundary disputes
- Unpaid taxes
- Unresolved building code violations
The title examiner will then provide a clear title only if no defects are present; otherwise, it cannot be deemed a clear title.
What is a Deed?
A deed is a legal document that transfers the title to the buyer once a transaction is complete. Unlike the title, the deed is a physical, legal document and must be stored safely by the new buyer. According to the Statute of Frauds, the document must be written and must contain the signatures of the seller and buyer after the real estate transactions are completed.
The deed contains a thorough description of the property. It also recognizes the grantee, referred to as the buyer, and the grantor, also known as the seller. After all the transaction procedures are completed, the buyer acquires the deed at closing.
Types of Deeds:
–General Warranty Deed: This type of deed is the most common, ensuring that the title is free from any liens, debts, or other encumbrances.
–Special Warranty Deed: This type of deed only warrants the title against any claims during the seller’s ownership.
–Quitclaim Deed: This type of deed is the least common and doesn’t offer any warranties on the title. It’s typically used when the seller can’t guarantee that they own the property free and clear.
–Bargain and Sale Deed: This type of deed is used to sell or transfer residential properties, but they do not guarantee that the property is free of liens or debts. The grantor is only identified as the title-holder. Any lien against the property would be transferred along with the title to the grantee.
–Grant Deed: The seller transfers their interest in a property to the buyer with a grant deed for a previously agreed-upon price.
Despite being a guarantee that the seller owns the property in its entirety, the grant deed does not protect the buyer from title defects such as:
- Boundary disputes
- Improper signature
- Undisclosed liens
- Errors in public records
–Deed of Trust: A deed of trust conveys the title of the property to a trustee, who holds it as security for a loan made to the buyer by a lender. If the buyer defaults on their payments, the trustee can sell the property to repay the lender.
-Mortgage Deed: A mortgage deed is a contract between a bank or lending institution and a homeowner, which gives the lender the right to attach a lien to a property if the loan is not repaid. As a result, a mortgage payment is made towards the debt of a loan, and the house serves as collateral.
The bank or lending institution holds the legal title to the property during the period of loan repayment under a mortgage deed.
How to Find the Best Real Estate Attorney Near Me
If you’re thinking about buying or selling property, it’s important to consult with a lawyer to ensure that the deed and title are in order. We understand that real estate can be complicated and confusing. With Saanichton Law Group, you can navigate the world of real estate with ease. Our real estate attorneys will guide you through the entire process, beginning from the transfer of ownership to the tasking legal work involved.
To learn more about our services, contact us at 250.544.0727 or mail us at info@saanichtonlaw.com. The team at Saanichton Law Group would be happy to help you with your real estate needs. Contact us today to get started.
