The Real Estate Encyclopedia
What Does Equitable Title Mean?
Category - Home Buying Questions - Buying Legal & Closing FAQ's

The term Equitable Title applies when ownership interest in a property is held by an entity that does not have legal title to the property. It also applies under circumstances where fairness requires that the "true" owner of the property be protected against adverse action by the holder of bare legal title to the property. For example, under an installment contract, the seller continues to hold title to a property between the time the buyer and seller sign a valid purchase agreement or contract and the time the seller delivers a deed to the buyer.

 

During the period starting with the buyer and seller signing the contract and the seller delivering the deed, the buyer is said to hold equitable title to the property and the seller is said to hold bare or naked title, i.e. title in name only without full ownership rights.  The term equitable title derives from the fact that a buyer can enforce specific performance of the contract in a court of equity to get title.  The title the buyer holds under a purchase or installment contract is transferable by subcontract, assignment or deed.  An equitable title can be sold or mortgaged and it passes to the purchaser’s heirs and devisees upon the buyer’s death. 

 
Category(s)
Home Buying Questions - Buying Legal & Closing FAQ's
Home Buying Questions - General Home Buying FAQ's
Home Selling Questions - General Home Selling FAQ's
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