Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Deed

What it is:

A deed is an ownership document that entitles its holder to specific rights to a property based on a set of explicit conditions.

How it works (Example):

In most cases, a deed establishes proper ownership of a piece of property such as a home or automobile. The deed grants the holder explicit privileges and rights that may only be exercised under duly expressed conditions. In this respect, a deed's conferment of unique rights or privileges brings with it a unique set of responsibilities.

An example would be a deed of ownership to a home. While the freedom inherent in the deed allows the holder to take many actions regarding the home, he is bound by the conditions of home ownership. For instance, though he may build a balcony on the back of his house, he may not be able to install a high-power speaker system as it could disturb the neighbors.

Why it Matters:

A deed sets specific privileges and rights that the holder alone may exercise and it sets rules that render the holder responsible for the consequences of exercising those rights.