Is Florida a Deed or Title State?
November 14, 2023It's virtually impossible to follow any real estate transaction without becoming acquainted with terms like 'title' and 'deed'. These are both core parts of most home purchase transactions, but there's enough room for people to get the terms mixed up.
We're here to clear out some common misconceptions. If you're planning to buy or sell a property in Florida territory, it's important to know exactly what's behind these words, and how they can affect the closing.
Defining Important Real Estate TerminologyLet's start by giving a basic definition for each term:
In Florida real estate law, a title represents legal ownership of a real estate property. If you've read some of our past content, you likely remember that a title displays the name of a property's owners, which is why title searches help confirm that a person selling a property has all the ownership rights at the time of closing.
Property titles don't always take the form of a physical document, but they still serve to outline the rights a person has upon becoming the owner. In general terms, property owners have the right to occupy and use the property in any way they like, barring the limitations placed by the title itself or an outside authority (municipal laws, homeowners associations, etc.) They're also free to transfer the ownership to another party.
A deed can't really be seen as the same thing, but there's enough overlap to raise some questions among home buyers.
A deed is a legal document that conveys the title during a transfer. It is signed during the closing, in the presence of a public notary and two witnesses. Basically, the deed is the physical document that individuals can use to validate their ownership rights over a real estate property. Besides identifying the property owners, the deed also names the seller and an accurate description of the property itself.
Different types of deeds are used in the state of Florida. Each of them corresponds to what the seller (grantor) wants to convey:
- Warranty Deed: It grants full warranty to the new owner. Under a warranty deed, owners can control and transfer property rights. They're also protected against title defects or claims dating back to the period before the sale. This is an advantageous deal all around, so it's no wonder that warranty deeds are the most common type of deed in Florida.
- Quitclaim Deed: It transfers ownership rights to the buyers, but provides no financial protection against unforeseen title defects. This is one of the least popular options, often associated with owners who want to avoid all liabilities that are attached to a rundown property.
- Special Warranty Deed: It conveys the title with a limited warranty for new owners. The warranty only covers the period before the transaction in which the seller/grantor had ownership rights. Any liens or title defects that could be traced to previous owners would automatically be the new owner's responsibility so, as the buyer, you'd have to carry the financial loss of an old debt or hidden claim.
- Life Estate Deed: In this arrangement, grantors would transfer the title and ownership rights while also retaining a life interest over the property. In other words, new owners can use the property in any way they want, including renovations or title transfers, but the grantor would still have the right to inhabit the property for the rest of their natural lives.
- Enhanced Life Estate Deed: Available in a limited number of states, this type of deed takes effect only after the grantor's passing. It is generally used as a backup to protect the grantor's family members in the event of sudden death but, in the meantime, grantors are free to revoke the deed and transfer the property rights.
What's the Difference Between a Title and a Deed?If we look at the closing process as a whole, there are multiple elements that differentiate a title from a deed, but the main takeaway is this:
A title is transferred via a deed, and this is the standard process in Florida real estate transactions. Both are important to leave a record of a title transfer, but a deed works as physical proof. This is why sellers and buyers are required to sign the deed during the closing.
A title shows who has legal right over the property, specifically to modify it or transfer interests, but on its own, it's not enough to determine who holds the property after a real estate transaction. That's why the process isn't complete without a signed deed.
Our Title & Escrow Experts Answer All Your QuestionsContextualizing the differences between a title and a deed can be hard withour the assistance of a real estate lawyer. We urge you to seek the assistance of a professional before making any decision, especially if you have questions about the downsides of different types of deeds. You deserve the best possible terms after making a real estate investment, and what's best that the most knowledgeable team in the Florida market.
Key Title & Escrow is here to ensure a smooth process from beginning to end. Our experts are ready to assist you with everything you need. Come get specialized counsel for your mortgage agreement or refinance a property mortgage with the most reliable team in South Florida. You can contact us by calling (305) 235-4571 or toll-free at (800) 547-0006 to learn more about our services. Our contact form is also available to get answers to any of your real estate-related questions.