North Carolina Real Estate: What is the Difference Between Property Title and a Property Deed?

Real estate transactions are complicated. Before you finalize the sale of residential or commercial property in North Carolina, it is imperative that you ensure that all documents are in order. As the world of real estate is full of ‘jargon’, there is a lot of confusion over what exactly terms mean.

Notably, the terms “title” and “deed” are often mistakenly used interchangeably. In reality, these real estate terms refer to different things. Here, our Monroe real estate lawyers explain the key things to understand about the difference between a property title and a property deed in North Carolina.

Property Title: Defined

A title is one of the single most important concepts in residential and commercial real estate in North Carolina. Simply described, “title” is a legal term that refers to ownership over property. If you hold the title to a piece of property that means that you are the rightful owner of it in the eyes of the law. When a property is sold through a real estate transaction, title is transferred from the buyer to the seller.

Property Deed: Defined

In North Carolina, a property deed refers to a specific document. A deed is the actual legal paperwork that transfers title from one party to another party. Whereas title is a legal concept (the enforceable and recognized right of ownership), a property deed is a physical document that clearly transfers ownership in a transaction—either a sale or a gift.

Why the Difference Matters: Title May Be Flawed, Even if a Deed has no Problems

To summarize, title is the legal concept of ownership over property. A deed is the actual document that transfers ownership rights from one party to another party. While this may seem like a subtle and highly technical difference, it is also very important. Here is the primary issue to keep in mind: there could be an issue with a property’s title even if the deed is prepared properly.

The reason is that the seller may not have free and clear title to the property. Any deed that they prepare in order to transfer the property to another party in a real estate transaction will not fix the defect with the title.

For this reason, it is imperative that a comprehensive title search is conducted before a real estate transaction is finalized. Under North Carolina law (N.C.G.S. § 58-26-1), title insurance companies are actually required to obtain a title opinion from an attorney before issuing insurance.

Call Our Monroe, NC Real Estate Attorneys Today

At Perry, Bundy, Plyler & Long, LLP, our North Carolina real estate transaction lawyers are diligent, solutions-focused advocates for clients. If you have any questions about property title or property deed, we can help. Give us a call now or contact us online for a strictly confidential consultation. We provide real estate law representation throughout Union County, including in Monroe, Fairview, Indian Trail, Weddington, Wingate, Matthews, Mint Hill, Stallings, and Mineral Springs.