What are legal and equitable estates?
A legal title describes the obligations and duties an owner has to uphold, utilize, and manage a property. The ownership of the property is determined by its legal title. The individual with legal title is typically identified by the recorded name of the property owner, which is accessible through public records. True ownership of the property is granted by legal title, along with the range of rights that go along with it. These rights consist of the following:
● Mineral rights
● Development rights
● Easement rights
● Control and possession
● Exclusive use
● Conveyance rights
● Right of disposition
If your name is listed as the grantee on a deed, you have legal title. The legal title refers to “apparent” ownership, which is ownership that is recorded in writing. Although you might believe that you have full legal title to a piece of property, this is not the case. Your ability to utilize and enjoy the property may be limited if another person holds equitable title.
Equitable title refers to the enjoyment of the property, whereas legal title emphasizes the obligations of the property owner. Equitable title refers to the advantages the buyer will have once they are granted legal ownership. True ownership does not include equitable ownership. In other words, a person with equitable title could not assert in court that they were the rightful owner or holder of the property. Legal title is necessary for true ownership. However, equitable title does give the owner more control over the property.
An equitable title and a legal title are fundamentally different from one another because only the latter confers actual ownership of the property. There are other smaller, more nuanced variations that can differ case-by-case. The titleholder is not permitted to sell or transfer ownership under an equitable title. The only title that has this ability is a legal title. The advantage of legal title over equitable title is that it enables the holder to seek payment from parties who buy or rent the property.