Title (property)

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In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, possession and title may each be transferred independently of the other. For real property, land registration and recording provide public notice of ownership information.

Contents

In United States law, typically evidence of title is established through title reports written up by title insurance companies, which show the history of title (property abstract and chain of title) as determined by the recorded public record deeds; [1] the title report will also show applicable encumbrances such as easements, liens, or covenants. [2] In exchange for insurance premiums, the title insurance company conducts a title search through public records and provides assurance of good title, reimbursing the insured if a dispute over the title arises. [3] In the case of vehicle ownership, a simple vehicle title document may be issued by a governmental agency.

The main rights in the title bundle are usually:

The rights in real property may be separated further, examples including:

Possession is the actual holding of a thing, whether or not one has any right to do so. The right of possession is the legitimacy of possession (with or without actual possession), the evidence for which is such that the law will uphold it unless a better claim is proven. The right of property is that right which, if all relevant facts were known (and allowed), would defeat all other claims. Each of these may be in a different person.

For example, suppose A steals from B, what B had previously bought in good faith from C, which C had earlier stolen from D, which had been an heirloom of D's family for generations, but had originally been stolen centuries earlier (though this fact is now forgotten by all) from E. Here A has the possession, B has an apparent right of possession (as evidenced by the purchase), D has the absolute right of possession (being the best claim that can be proven), and the heirs of E, if they knew it, have the right of property, which they cannot prove. Good title consists in uniting these three (possession, right of possession, and right of property) in the same person(s).

The extinguishing of ancient, forgotten, or unasserted claims, such as E's in the example above, was the original purpose of statutes of limitations. Otherwise, title to property would always be uncertain.

At common law equitable title is the right to obtain full ownership of property, where another maintains legal title to the property. [4]

When a contract for the sale of land is executed, equitable [interest/title] passes to the buyer. When the conditions on the sale contract have been met, legal title passes to the buyer in what is known as closing. Some companies, such as Econohomes/Visio Financial, use this term to describe a "trailing deed". This is not the case. Properties that are sold on the basis of equitable title have a legal chain of title intact, and a recorded transfer with the local municipality.

Legal title is actual ownership of the property as when the property has been bought, the seller paid in full and a deed or title is properly recorded. Equitable title separates from legal title upon the death of the legal title holder (owner). For example: When a person having legal title to property dies, heirs at law or beneficiaries per the last will, automatically receive equitable interest in the property. When an executor or administrator qualifies, that person acquires legal title, subject to divestment when the estate has been administered so as to allow for the lawful passing of the legal title to those having an equitable interest. The resulting merger of the legal and equitable gives rise to "perfect title," often referred to as marketable title.

Legal and equitable title also arises in trust. In a trust, one person may own the legal title, such as the trustees. Another may own the equitable title such as the beneficiary. [5]

Applications

In countries with a sophisticated private property system, documents of title are commonly used for real estate, motor vehicles, and some types of intangible property. When such documents are used, they are often part of a registration system whereby ownership of such property can be verified. In some cases, a title can also serve as a permanent legal record of condemnation of property, such as in the case of an automobile junk or salvage title. In the case of real estate, the legal instrument used to transfer title is the deed. A famous rule is that a thief cannot convey good title, so title searches are routine (or highly recommended) for purchases of many types of expensive property (especially real estate). In several counties and municipalities in the US a standard title search (generally accompanied by title insurance) is required under the law as a part of ownership transfer.

Paramount title is the best title in Fee simple available for the true owner. The person who is owner of real property with paramount title has the higher (or better, or "superior") right in an action to Quiet title. The concept is inherently a relative one. Technically, paramount title is not always the best (or highest) title, since it is necessarily based on some other person's title. [6] [7]

A quiet title action is a lawsuit to resolve with any cloud on title, such as competing claims or rights to real property, for example, missing heirs, tenants, reverters, remainders and lien holders all competing to get ownership to the house or land. [8] [9] Technical problems with title include misspellings, outstanding debt, unrecorded transactions, and any irregularity that might indicate a break in the chain of ownership. Each of the United States have different procedures for a quiet title action. [10]

However, most personal property items do not have a formal document of title. For such items, possession is the simplest indication of title, unless the circumstances give rise to suspicion about the possessor's ownership of the item. Proof of legal acquisition, such as a bill of sale or purchase receipt, is contributory. Transfer of possession to a good faith purchaser will normally convey title if no document is required.

Political issues

California prevented aliens (mainly Asians) from holding title to land until the law was declared unconstitutional in 1952. [11] Currently there are no restrictions on foreign ownership of land in the United States, although sales of real estate by non-resident aliens are subject to certain special taxation rules.

Aboriginal title

Prior to the establishment of the United States title to Indian lands in lands controlled by Britain in North America was governed by The Royal Proclamation of October 7, 1763. This proclamation by King George III reserved title in land to the Indians, subject to alienation only by the Crown. This continued to be the law of Canada following the American Revolution. [12]

In the United States Indian title is the subservient title held by Native Americans in the United States to the land they customarily claimed and occupied. It was first recognized in Johnson v. M'Intosh , 21 U.S. (8 Wheat ) 543 (1823).

It very early became accepted doctrine in this Court that although fee title to lands occupied by Indians when the colonists arrived became vested in the sovereign – first the discovering European nation and later the original states and the United States – a right of occupancy in the Indian tribes was nevertheless recognized. That right, sometimes called Indian Title and good against all but the sovereign, could be terminated only by sovereign act. Once the United States was organized and the Constitution adopted, these tribal rights to Indian lands became the exclusive province of the federal law. Indian title, recognized to be only a right of occupancy, was extinguishable only by the United States. Oneida Indian Nation v. County of Oneida , 414 U.S. 661, 667 (1974).

The usual method of extinguishing Indian title was by treaty. [13]

See also

Related Research Articles

Property law is the area of law that governs the various forms of ownership and tenancy in real property and in personal property, within the common law legal system. In the civil law system, there is a division between movable and immovable property. Movable property roughly corresponds to personal property, while immovable property corresponds to real estate or real property, and the associated rights, and obligations thereon.

Trust law three-party fiduciary relationship

A trust is a three-party fiduciary relationship in which the first party, the trustor or settlor, transfers ("settles") a property upon the second party for the benefit of the third party, the beneficiary.

Escheat is a common law doctrine that transfers the real property of a person who has died without heirs to the Crown or state. It serves to ensure that property is not left in "limbo" without recognized ownership. It originally applied to a number of situations where a legal interest in land was destroyed by operation of law, so that the ownership of the land reverted to the immediately superior feudal lord.

In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. It is a way that real estate and land may be owned in common law countries, and is the highest possible ownership interest that can be held in real property. Allodial title is reserved to governments under a civil law structure. The rights of the fee simple owner are limited by government powers of taxation, compulsory purchase, police power, and escheat, and it could also be limited further by certain encumbrances or conditions in the deed, such as, for example, a condition that required the land to be used as a public park, with a reversion interest in the grantor if the condition fails; this is a fee simple conditional.

In common law and statutory law, a life estate is the ownership of land for the duration of a person's life. In legal terms, it is an estate in real property that ends at death when ownership of the property may revert to the original owner, or it may pass to another person. The owner of a life estate is called a "life tenant".

A mortgage is a legal instrument which is used to create a security interest in real property held by a lender as a security for a debt, usually a loan of money. A mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.

A deed is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions, sealed. It is commonly associated with transferring (conveyancing) title to property. The deed has a greater presumption of validity and is less rebuttable than an instrument signed by the party to the deed. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds. The deed is the modern descendant of the medieval charter, and delivery is thought to symbolically replace the ancient ceremony of livery of seisin.

Adverse possession, sometimes colloquially described as "squatter's rights", is a legal principle under which a person who does not have legal title to a piece of property—usually land —acquires legal ownership based on continuous possession or occupation of the land without the permission of its legal owner.

Seisin denotes the legal possession of a feudal fiefdom or fee, that is to say an estate in land. It was used in the form of "the son and heir of X has obtained seisin of his inheritance", and thus is effectively a term concerned with conveyancing in the feudal era. The person holding such estate is said to be "seized of it", a phrase which commonly appears in inquisitions post mortem. The monarch alone "owned" all the land of England by his allodial right and all his subjects were merely his tenants under various contracts of feudal tenure.

A land patent is an exclusive land grant made by a sovereign entity with respect to a particular tract of land. To make such a grant "patent", a sovereign must document the land grant, securely sign and seal the document (patent), and openly publish the documents for the public to see. An official land patent is the highest evidence of right, title, and interest to a defined area. It is usually granted by a central, federal, or state government to an individual or to a private company.

In property law, a concurrent estate or co-tenancy is any of various ways in which property is owned by more than one person at a time. If more than one person owns the same property, they are commonly referred to as co-owners. Legal terminology for co-owners of real estate is either co-tenants or joint tenants, with the latter phrase signifying a right of survivorship. Most common law jurisdictions recognize tenancies in common and joint tenancies.

A covenant in its most general sense and historical sense, is a solemn promise to engage in or refrain from a specified action. Under historical English common law a covenant was distinguished from an ordinary contract by the presence of a seal. Because the presence of a seal indicated an unusual solemnity in the promises made in a covenant, the common law would enforce a covenant even in the absence of consideration. In United States contract law, an implied covenant of good faith is presumed.

In United States law, the term color of law denotes the "mere semblance of legal right", the "pretense or appearance of" right; hence, an action done under color of law adjusts (colors) the law to the circumstance, yet said apparently legal action contravenes the law. Under color of authority is a legal phrase used in the US indicating that a person is claiming or implying the acts he or she is committing are related to and legitimized by his or her role as an agent of governmental power, especially if the acts are unlawful.

Land Registration Act 2002 United Kingdom legislation

The Land Registration Act 2002 is an Act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though similar, system. The Act, together with the Land Registration Rules, regulates the role and practice of HM Land Registry.

In real estate business and law, a title search or property title search is the process of retrieving documents evidencing events in the history of a piece of real property, to determine relevant interests in and regulations concerning that property.

Equitable interest

An equitable interest is an "interest held by virtue of an equitable title or claimed on equitable grounds, such as the interest held by a trust beneficiary." The equitable interest is a right in equity that may be protected by an equitable remedy. This concept exists only in systems influenced by the common law tradition, such as New Zealand, England, Canada, Australia and the United States.

English property law refers to the law of acquisition, sharing and protection of valuable assets in England and Wales. While part of the United Kingdom, many elements of Scots property law are different. In England, property law encompasses four main topics:

An easement is a nonpossessory right to use and/or enter onto the real property of another without possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of another, B". It is similar to real covenants and equitable servitudes; in the United States, the Restatement (Third) of Property takes steps to merge these concepts as servitudes.

Easements in English law are certain rights in English land law that a person has over another's land. Rights recognised as easements range from very widespread forms of rights of way, most rights to use service conduits such as telecommunications cables, power supply lines, supply pipes and drains, rights to use communal gardens and rights of light to more strained and novel forms. All types are subject to general rules and constraints. As one of the formalities in English law express, express legal easements must be created by deed.

Real property legal term; property consisting of land and the buildings on it

In English common law, real property, real estate, realty, or immovable property is land which is the property of some person and all structures integrated with or affixed to the land, including crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads, among other things. The term is historic, arising from the now-discontinued form of action, which distinguished between real property disputes and personal property disputes. Personal property was, and continues to be, all property that is not real property.

References

  1. American Bar Association. (1995). The American Bar Association guide to home ownership: the complete and easy guide to all the law every home owner should know. ISBN   0812925351, 9780812925357. Ch.3 sample.
  2. 3 Things You Should Know About Preliminary Title Reports. ZillowBlog.
  3. "What is a Title Company?". Benchmark Title Company. Archived from the original on April 10, 2013.
  4. In the United States, legal titles are those that were recognized by the law courts in England. Equitable titles were those recognized by the English chancery courts. Both concepts were adopted by the various states upon their creation except, possibly, those based upon European Civil Law, such as Louisiana. Most, if not all of the states have merged the law and equity courts into a single court system, though there may still be law and chancery divisions in some of the systems.
  5. "Trusts and Estates – What is the difference between legal title and equitable title?". quizlaw.com. Retrieved 28 March 2010.
  6. "Answers – The Most Trusted Place for Answering Life's Questions". Answers.com.
  7. "Enotes: West's Law Encyclopedia". enotes.com. Archived from the original on 2006-11-21.
  8. "Enotes: West's Law Encyclopedia". enotes.com. Archived from the original on 2006-11-21.
  9. "Legal Dictionary – Law.com". Law.com Legal Dictionary.
  10. For example, California --quiet title action
  11. Sei Fujii v. State of California, 242P.2d718 , 617(California Supr.1952)("...we hold that the alien land law is invalid as in violation of the Fourteenth Amendment.").
  12. "Virtual Law Office: Royal Proclamation of 1763". www.bloorstreet.com.
  13. "Indian Lands" Douglas Roger Nash