Deed vs title: Understanding key differences

Mr. Mehta, a chartered accountant, secured a high-paying job in a multinational company. He was appointed as their senior internal auditor. His appointment letter, printed on the company's official letterhead, clearly mentioned his job title, date of joining, remuneration and other important details. If the difference between 'senior internal auditor' and 'appointment letter' in this example is clear, it won't be too hard to understand the difference between a title and a deed.

Decoding 'deed vs title'

How to define 'title'?

A title denotes the legal ownership of an asset, which can be tangible or intangible. In real estate parlance, it refers to the ownership of a property. The title is passed to the buyer from the seller when a house is bought. This title confers the buyer the right to own, control and use that house. A buyer can hold the title individually or jointly.

Here are two important things to note about property titles:

1. Title search

   For stress-free home ownership, the title must be free of any defects. For example, no third party should be able to claim the transferred ownership. Earlier, one had to visit local government offices to check the title status. However, the task has become much easier with the advent of digitalisation. Now, buyers can run a title search online by simply visiting the land record website of the state where the property is located. For instance, homebuyers in Maharashtra can visit the official Mahabhumi website to get the desired results. To end their search, they must enter the details of the concerned property. They must also mention the details they seek, such as the pricing or dispute history.

   Title checks are a must before deciding on a property to avoid being subject to financial or legal challenges in future.

2. Title insurance

   Title insurance protects home buyers from potential losses owing to defective titles. It is retrospective in nature since it covers events that have already occurred in the past. Despite its uniqueness and ability to offer peace of mind to buyers, it is quite uncommon in India.

What is a deed?

A deed is a legal instrument that facilitates the transfer of title or ownership between two parties. Once both parties sign the deed, it must be registered with the concerned area's Sub-Registrar's office to be legally binding.

A deed typically consists of the following components:

• Date and place of recording the deed
• Details and signatures of parties
• Consideration amount
• Rights and privileges of the owner
• Property details
• Terms of transfer
• Warranties

Types of deed

• Sale deed: It involves a seller and a buyer, in which ownership is transferred in exchange for monetary considerations. The seller is called the grantor, and the buyer is referred to as the grantee.
• Gift deed: Unlike a sale deed, a gift deed does not involve monetary considerations since the ownership is transferred from one party to another as a gift. The one who transfers the ownership is known as the donor, while the one who receives it is the recipient.
• Lease deed: This deed records the transfer of the right to occupy a property for a specified period. The landlord is known as the lessor, whereas the tenant is referred to as the lessee.
• Mortgage deed: A mortgage deed records the terms of a loan between a borrower and a lender. There is no transfer of ownership; the deed only gives the lender the legal right and interest in a property.
• Exchange deed: This deed records a barter. One party transfers the ownership of a property to another party in exchange for the ownership of another property. There is no money involved.

Deed vs title: Differences at a glance

To sum it up

Although used interchangeably, a deed and a title are notably different. Understanding the meaning and importance of both helps ensure a seamless home-buying experience.