Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest . The rights in the bundle may be separated and held by
different parties. It may also refer to a formal document that serves as evidence of ownership . Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession , a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other.
The main rights in the title bundle are usually:
The rights in real property may be separated further, examples including:
Possession is the actual holding of a thing, whether or not one has any right to do so. The right of possession is the legitimacy of possession (with or without actual possession), the evidence for which is such that the law will uphold it unless a better claim is proven. The right of property is that right which, if all relevant facts were known (and allowed), would defeat all other claims. Each of these may be in a different person.
For example, suppose A steals from B, what B had previously bought in good faith from C, which C had earlier stolen from D, which had been an heirloom of D’s family for generations, but had originally been stolen centuries earlier (though this fact is now forgotten by all) from E. Here A has the possession, B has an apparent right of possession (as evidenced by the purchase), D has the absolute right of possession (being the best claim that can be proven), and the heirs of E, if they knew it, have the right of property, which they cannot prove. Good title consists in uniting these three (possession, right of possession, and right of property) in the same person(s).
The extinguishing of ancient, forgotten, or unasserted claims, such as E’s in the example above, was the original purpose of statutes of limitations . Otherwise, title to property would always be uncertain.
Equitable versus legal title
The equitable title refers to the actual enjoyment and use of a property , whereas a legal title implies actual ownership. An example of such is a trust . In a trust, one person may own the legal title, such as the trustees . Another may own the equitable title such as the beneficiary .
In countries with a sophisticated private property system, documents of title are commonly used for real estate , motor vehicles , and some types of intangible property. When such documents are used, they are often part of a registration system whereby ownership of such property can be verified. In some cases, a title can also serve as a permanent legal record of condemnation of property, such as in the case of an automobile junk or salvage title . In the case of real estate , the legal instrument used to transfer title is the deed . A famous rule is that a thief cannot convey good title, so title searches are routine (or highly recommended) for purchases of many types of expensive property (especially real estate). In several counties and municipalities in the US a standard title search (generally accompanied by title insurance ) is required under the law as a part of ownership transfer.
Paramount title is the best title in Fee simple available for the true owner. The person who is owner of real property with paramount title has the higher (or better, or “superior”) right in an action to Quiet title . The concept is inherently a relative one. Technically, paramount title is not always the best (or highest) title, since it is necessarily based on some other person’s title.  
A Quiet title action is a lawsuit to settle competing claims or rights to real property, for example, missing heirs , tenants , reverters , remainders and lien holders all competing to get ownership to the house or land.   Each of the United States have different procedures for a quiet title action . 
However, most personal property items do not have a formal document of title. For such items, possession is the simplest indication of title, unless the circumstances give rise to suspicion about the possessor’s ownership of the item. Proof of legal acquisition, such as a bill of sale or purchase receipt, is contributory. Transfer of possession to a good faith purchaser will normally convey title if no document is required.
California prevented aliens (mainly Asians ) from holding title to land until the law was declared unconstitutional in 1952. Currently there are no restrictions on foreign ownership of land in the United States, although sales of real estate by non-resident aliens are subject to certain special taxation rules.
A deed is a signed and, in some jurisdictions, usually sealed legal instrument in writing used to grant a right . Deeds have historically been part of the broader category of instruments under seal , requiring only the affixing of a common seal to render them valid. Today, however, deeds are instruments in solemn form which require the author’s signature and, depending upon the jurisdiction, either notarization or a number of attesting witnesses. In some places (but usually not in the United States), deeds are also referred to as agreements under seal , contracts by deed , or specialties . A specialty is a contract under seal (bond, legal mortgage, debt secured by writing under seal) and formerly ranked in priority above a simple contract in the administration of a decedent’s estate for paying off liabilities, especially since specialties have a 12 year limitation period, twice that of a simple contract.They are often used by lawyers when a very formal document is required.
Deeds can be described as contract-like as they require the mutual agreement of more than one person. Deeds can therefore be distinguished from covenants , which, being also under seal, are unilateral promises. However, a deed differs from a simple contract in that it is enforceable without consideration , in some jurisdictions has a liability limitation period of double that of a contract, and allows for a third party beneficiary to enforce an undertaking in the deed, thereby overcoming the doctrine of privity . In its narrowest sense, a deed is any formal document that confirms or transfers interest or right of ownership ( title ) to an asset from one person to another, often using a description of its metes and bounds , e.g., conveyances , transfers, mortgages , charges, or leases ; these are known as deeds of title (title-deeds). However, by the general definition, powers of attorney , commissions , patents , and even diplomas conferring academic degrees are also deeds.
Traditionally and under common law , to be valid and enforceable, a deed must fulfill several requirements:
- It must state on its face it is a deed, using wording like “This Deed…” or “executed as a deed”.
- It must indicate that the instrument itself conveys some privilege or thing to someone. This is indicated by using the word hereby or the phrase by these presents in the clause indicating the gift.
- The grantor must have the legal ability to grant the thing or privilege.
- The grantee must have the legal capacity to receive it.
- It must be executed by the grantor in presence of the prescribed number of witnesses, known as instrumentary witnesses (this is known as being in solemn form ) or be notarized.
- A seal must be affixed to it. Originally, affixing seals made persons parties to the deed and signatures were optional, but most jurisdictions made seals outdated, and now the grantor and either witnesses signatures or notarization are primary.
- It must be delivered to ( delivery ) and accepted by the grantee ( acceptance ).
- It should be properly acknowledged before a competent officer, most often a notary public .
Conditions attached to the acceptance of a deed are known as covenants . A deed indented or indenture is one executed in two or more parts according to the number of parties, which were formerly separated by cutting in a curved or indented line known as the chirograph. A deed poll is one executed in one part, by one party, having the edge polled or cut even, and includes simple grants and appointments.
General and special warranty
In the transfer of real estate, a deed conveys ownership from the old owner (the grantor) to the new owner (the grantee), and can include various warranties . The precise name and nature of these warranties differ by jurisdiction. Often, however, the basic differences between them is the degree to which the grantor warrants the title. The grantor may give a general warranty of title against any claims, or the warranty may be limited only to claims which occurred after the grantor obtained the real estate. The latter type of deed is usually known as a special warranty deed . While a general warranty deed was normally used for residential real estate sales and transfers, special warranty deeds are becoming more common and are more commonly used in commercial transactions.
Bargain and sale deed
A third type of deed, known as a bargain and sale deed , implies that the grantor has the right to convey title but makes no warranties against encumbrances. This type of deed is most commonly used by court officials or fiduciaries that hold the property by force of law rather than title, such as properties seized for unpaid taxes and sold at sheriff’s sale , or an executor .
A so-called quitclaim deed is (in most states) actually not a deed at all—it is actually an estoppel disclaiming rights of the person signing it to property.
Deed of trust
In some jurisdictions, a deed of trust is used as an alternative to a mortgage . A deed of trust is not used to transfer property directly. It is commonly used in some states, California, for example, to transfer title to land to a “trustee”, usually a trust or title company, which holds the title as security (“in escrow “) for a loan. When the loan is paid off, title is transferred to the borrower by recording a release of the obligation, and the trustee’s contingent ownership is extinguished. Otherwise, upon default, the trustee will liquidate the property with a new deed and offset the lender’s loss with the proceeds.
Deeds as alternatives to bankruptcy
- Deed of arrangement – document setting out an arrangement for a debtor to pay part or all outstanding debts, as an alternative to bankruptcy; (Australian law).
- Deed of assignment – document in which a debtor appoints a trustee to take charge of property to pay debts, partly or wholly, as an alternative to bankruptcy; (Australian law).
Usually the transfer of ownership of real estate is registered at a cadastre in the United Kingdom . In most parts of the United States, deeds must be submitted to the Recorder of deeds , who acts as a cadastre, to be registered. An unrecorded deed may be valid proof of ownership between the parties, but may have no effect upon third-party claims until disclosed or recorded. A local statute may prescribe a period beyond which unrecorded deeds become void as to third-parties, at least as to intervening acts.
Ownership transfer may also be crafted within deeds to pass by demise, as where a property is held in concurrent estate such as “joint tenants with right of survivorship” (JTWROS) or “tenants by the entirety”. In each case, the title to the property immediately and automatically vests in the named survivor(s) upon the death of the other tenant(s).
In most states joint tenancy with the right of survivorship require all owners to have equal interests in the property, meaning upon sale or partition of the property all owners would receive an equal distribution of the proceeds.
Joint ownership may also be by tenants in common (TIC). In some states, joint ownership is presumed to be as tenants in common unless the parties are married and the deed so states or the deed sets for joint tenants with right of survivorship. Upon death, the decedent’s share passes to his or her estate.
A life estate is the right to use, possess and enjoy the property for a period of time measured by the natural life of a person or persons. When all life tenants are dead, the remainderman holds full title.
Joint tenants with rights of survivorship vs. joints tenants in common
When deeds are taken as joint tenants with rights of survivorship (JTWROS) or joint tenants in common (TIC), any co-owner can file a petition for partition to dissolve the tenancy relationship. JTWROS deed holders always take the property in equal shares; therefore, if the partnership is dissolved through partition, the proceeds must be equally distributed between all of the co-owners without regard to how much each co-owner contributed to the purchase price of the property. No credits would be allowed for any excess contributions to the purchase price. For example, if A and B co-own property as JTWROS and A contributed 80% of the purchase price, A and B would still receive equal distributions upon partition. On the other hand, TIC deed holders may be granted at partition a credit for unequal contributions to purchase price. During either partition, credits may be awarded to any co-owner who may have contributed in excess of his share to the property expenses after taking deed to the property. Credits may be allowed for utilities and maintenance; however, credits for improvements may not be allowed unless the improvements actually added substantial value to the property.
In the United States , a pardon of the President was once considered to be a deed and thus needed to be accepted by the recipient. This made it impossible to grant a pardon posthumously. However, in the case of Henry Ossian Flipper , this view was altered when President Bill Clinton pardoned him in 1999.
In the United Kingdom, England and Wales operate a ‘property register’. Title deeds are documents showing ownership, as well as rights, obligations, or mortgages on the property. Since around 2000, compulsory registration has been required for all properties mortgaged or transferred. The details of rights, obligations, and covenants referred to in deeds will be transferred to the register, a contract describing the property ownership.
Difference between deed and an agreement
The main difference between Deed and an agreement is that the deed is generally signed by only one person / party. Examples of the Deed are Deed of Hypothecation for creating charge on movable properties in favour of the banks / financial institutions etc.
Agreement by it names suggests that there should be at least two parties signing / approving the same. Examples of the agreement are Agreement to sale, Loan Agreement etc.
At common law, ownership was proven via an unbroken chain of title deeds. The Torrens title system is an alternative way of proving ownership. First introduced in South Australia in 1858 by Sir Robert Torrens and adopted later by the other Australian states and other countries, ownership under Torrens title is proven by possession of a certificate of title and the corresponding entry in the property register. This system removes risks associated with unregistered deeds and fraudulent or otherwise incorrect transactions. It is much easier and cheaper to administer, lowering transaction costs. Some Australian properties are still conveyed using a chain of title deeds – usually properties that have been owned by the same family since the nineteenth century – and these are often referred to as ‘Old System’ deeds.
A deed that is recorded, but is not connected to the chain of title of the property, is called a wild deed . A wild deed does not provide constructive notice to later purchasers of the property, because subsequent bona fide purchasers can not reasonably be expected to locate the deed while investigating the chain of title to the property.
When purchasing property, buyers should be aware of any possible property restrictions that will impact their intended use. Property owner’s rights generally allow them to use their property freely, however, there are restrictions on real property from real property laws that owners need to know. Property restrictions can come from the government or from private agreements with surrounding property owners. Government restrictions come from real property law, and can include zoning statutes, environmental regulations, restrictive covenant, or anti-nuisance laws designed to ensure the use of one property does not negatively affect surrounding property owners’ rights. Private agreements regulating use create what is known as a restrictive covenant. A restrictive covenant is a signed contract between property owners of adjacent or nearby properties that can enforce a variety of property restrictions such as: listing allowable structures and improvements, restricting the height of structures on the property, and specifying what type of building can go on a property. A restrictive covenant is commonly found in residential development neighborhoods to promote uniformity in appearance and use throughout. Buyers should be aware of any restrictive covenants prior to a real estate purchase. For assistance understanding property restrictions, consult a real estate attorney.
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