The world of real estate can be a confusing one. You might be wondering if you need a property deed, and if so, which type?
When you’re looking to make a big purchase, you probably want to know whether the property will be easy to sell and manage. And that’s where real estate documentation comes in.
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Here are answers to all your questions concerning property deeds:
What is a property deed?
A property deed is a legal document that governs the transfer of ownership in a piece of real estate. There are many types of property deeds, but the main ones are absolute, conditional, and shared.
An absolute property deed transfers full property ownership without any conditions or restrictions. This type of deed is used when buying a home or land you plan to build on.
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A conditional property deed transfers ownership of your home if certain conditions are met when it’s transferred—for example, if you buy a house and then move out within two years.
A shared property deed transfers ownership of your home but includes conditions that only apply to some owners while others don’t have to abide by them. For example, if there’s a clause that states whoever sells their share of the house must pay for improvements made since then.
HM Land Registry stores all this information in the UK.
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Do I need a real estate deed?
If HM Land Registry has captured your property, you don’t need a real estate deed.
If you own a property, you can check on it at HM Land Registry to see what’s been happening with it. If any transactions have occurred since the last time you visited, then HM Land Registry will have captured those transactions and added them to your property’s record. If this is the case for you, then you do not need a real estate deed—HM Land Registry already has all the information you need!
If you purchased any land or property and the transfer has been entered into the system by HM Land Registry, then you do not need any deed to prove ownership. A simple click on the computer would prove that you are the property owner.
That said, you shouldn’t ignore taking the document.
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Which type of property deed do I need?
There are different deeds, and you must use the right kind for your situation. You can think of them like this:
Absolute Deed – This type of deed gives you ownership of property in its entirety, whether you have paid for it or not. It’s usually used when you’re buying a house or an apartment or when you’re buying a piece of land. It’s also commonly used when buying property from an owner who has died and left it to their heirs.
Possessory Deed – This type of deed applies only to your right to receive payments from the property itself. For example, if you rent out an apartment, the possessor would sign this type of deed so that they could come into possession whenever someone else rents out their apartment. Possessory deeds transfer only limited rights over a piece of property; they may not include specific powers like those found in absolute deeds. Possessory deeds typically allow owners to use their properties in particular ways, such as renting out rooms or parking spaces.
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Qualified Deed – If your property deed has defects that can be identified with a title, you’re probably looking at a qualified deed. A qualified deed is issued when a defect is identified with a title—i.e., if you own an apartment building and the registrar discovers that the transaction for the sale of the building was malicious. Or if the transaction was made in breach of trust. This deed can be issued for freeholds and leaseholds.
Good Leasehold Deed – This type of deed is issued when a leasehold property has conditions with which the original owner can regain the property before the leasehold is over.
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Are there different rules of deeds in the UK?
There are different rules for different types of real estate property deeds in the UK. The HM Land Registry only governs England and Wales, but Scotland and Northern Ireland also have their own land registries.
So, if you want to buy or sell a property in Scotland or Northern Ireland, you’ll need to use their system.
It’s true that HM Land Registry captures all the transfer details of a property and the new owners. Their system captures who owns the land. They will guide you on what type of deed will be issued.
The HM Land Registry knows who owns the land, who can sell it, and what rights they have over it. If you don’t have a deed, you won’t face disputes with other landowners or third parties over ownership of the land—everything is captured by HM Land Registry as proof that you are the owner.
You’ll need a title deed if you need to take a loan or financing with that property. Financial institutions require the document to ascertain that you are the landowner.