Title (property)
Encyclopedia
Title is a legal
term for a bundle of rights
in a piece of property in which a party may own either a legal interest or an equitable interest
. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document
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, both possession and title may be transferred independently of each other.
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.
, whereas a legal title implies actual ownership. An example of such is a 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
.
Another example is a land contract
(also known as a contract for deed) whereby a seller transfers equitable title to a buyer and promises to transfer legal title upon the buyer's full payment. Similarly, mortgage servicers that sell REO (foreclosures) in bulk transfer equitable title to their buyers with the promise of delivering a trailing deed upon receipt of a foreclosure deed.
system, documents of title are commonly used for real estate
, motor vehicle
s, 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 search
es 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.
A Quiet title
action is a lawsuit to settle 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. Each of the United States
have different procedures for a quiet title action.
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.
prevented aliens (mainly Asians
) from holding title to land
until the law was declared unconstitutional
in 1952. 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.
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.
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).
The usual method of extinguishing Indian title was by treaty.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
term for a bundle of rights
Bundle of Rights
The bundle of rights is a common way to explain the complexities of property ownership. Teachers often use this concept as a way to organize confusing and sometimes contradictory data about real estate....
in a piece of property in which a party may own either a legal interest or an equitable interest
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, if violated , is subject to satisfaction...
. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document
Document
The term document has multiple meanings in ordinary language and in scholarship. WordNet 3.1. lists four meanings :* document, written document, papers...
that serves as evidence of ownership
Ownership
Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties. The concept of ownership has...
. 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
Right
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...
that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other.
Elements
The main rights in the title bundle are usually:- Exclusive possession
- Exclusive useUse (law)Use, as a term in real property law of common law countries, amounts to a recognition of the duty of a person, to whom property has been conveyed for certain purposes, to carry out those purposes....
and enclosureEnclosureEnclosure or inclosure is the process which ends traditional rights such as mowing meadows for hay, or grazing livestock on common land. Once enclosed, these uses of the land become restricted to the owner, and it ceases to be common land. In England and Wales the term is also used for the... - AcquisitionAcquisitionAcquisition may refer to:* Takeover, the acquisition of a company* Mergers and acquisitions, strategy of buying and selling of various companies to quickly grow a company...
- Conveyance, including by bequestBequestA bequest is the act of giving property by will. Strictly, "bequest" is used of personal property, and "devise" of real property. In legal terminology, "bequeath" is a verb form meaning "to make a bequest."...
- Access easementEasementAn easement is a certain right to use the real property of another without possessing it.Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to fish in a privately owned pond...
- HypothecationHypothecationHypothecation is the practice where a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral, but it is "hypothetically" controlled by the creditor in that he has the right to seize possession if the borrower defaults...
- PartitionPartition (law)A partition is a term used in the law of real property to describe an act, by a court order or otherwise, to divide up a concurrent estate into separate portions representing the proportionate interests of the tenants. Under the common law, any tenant who owns an undivided concurrent interest in...
The rights in real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
may be separated further, examples including:
- Water rights, including riparian rightsRiparian water rightsRiparian water rights are system for allocating water among those who possess land about its source. It has its origins in English common law...
and runoff rights - In some U.S. states, water rights are completely separate from land—see prior appropriation water rightsPrior appropriation water rightsPrior appropriation water rights, sometimes known as the Colorado Doctrine in reference to the U.S. Supreme Court case Wyoming v. Colorado, is a system of allocating water rights from a water source that is markedly different from riparian water rights...
- Mineral rightsMineral rights- Mineral estate :Ownership of mineral rights is an estate in real property. Technically it is known as a mineral estate and often referred to as mineral rights...
- EasementEasementAn easement is a certain right to use the real property of another without possessing it.Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to fish in a privately owned pond...
to neighboring property, for utility lines, etc. - Tenancy or tenureLand tenureLand tenure is the name given, particularly in common law systems, to the legal regime in which land is owned by an individual, who is said to "hold" the land . The sovereign monarch, known as The Crown, held land in its own right. All private owners are either its tenants or sub-tenants...
in improvements - Timber rights
- Farming rights
- Grazing rightsGrazing rightsGrazing rights is a legal term referring to the right of a user to allow their livestock to feed in a given area.- United States :...
- Hunting rights
- Air rightsAir rightsAir rights are a type of development right in real estate, referring to the empty space above a property. Generally speaking, owning or renting land or a building gives one the right to use and develop the air rights....
- Development rights to erect improvements under various restrictions
- Appearance rights, often subjected to local zoning ordinances and deed restrictions
Possession is the actual holding of a thing, whether or not one has any right to do so. The right of possession
Right of possession
The right of possession means that someone currently holds something in hand and this person may be the temporary keeper or the long-term owner of an object.This term is most commonly used in regards to property and is a land-backed asset...
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
Statute of limitations
A statute of limitations is an enactment in a common law legal system that sets the maximum time after an event that legal proceedings based on that event may be initiated...
. Otherwise, title to property would always be uncertain.
Equitable versus legal title
The equitable title refers to the actual enjoyment and use of a propertyProperty
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
, whereas a legal title implies actual ownership. An example of such is a 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
Beneficiary (trust)
In trust law, a beneficiary or cestui que use, a.k.a. cestui que trust, is the person or persons who are entitled to the benefit of any trust arrangement. A beneficiary will normally be a natural person, but it is perfectly possible to have a company as the beneficiary of a trust, and this often...
.
Another example is a land contract
Land contract
A 'land contract' is a contract between a seller and buyer of real property in which the seller provides financing to buy the property for an agreed-upon purchase price and the buyer repays the loan in installments...
(also known as a contract for deed) whereby a seller transfers equitable title to a buyer and promises to transfer legal title upon the buyer's full payment. Similarly, mortgage servicers that sell REO (foreclosures) in bulk transfer equitable title to their buyers with the promise of delivering a trailing deed upon receipt of a foreclosure deed.
Applications
In countries with a sophisticated private propertyPrivate property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
system, documents of title are commonly used for real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
, motor vehicle
Motor vehicle
A motor vehicle or road vehicle is a self-propelled wheeled vehicle that does not operate on rails, such as trains or trolleys. The vehicle propulsion is provided by an engine or motor, usually by an internal combustion engine, or an electric motor, or some combination of the two, such as hybrid...
s, 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
Salvage title
In the United States, a salvage title is a form of vehicle title branding, which notes that the vehicle has been severely damaged and/or deemed a total loss by an insurance company that paid a claim on it. The criteria for determining when a salvage title is issued differ considerably by state...
. In the case of real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
, the legal instrument used to transfer title is the deed
Deed
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed...
. A famous rule is that a thief cannot convey good title, so title search
Title search
A title search is a process that is performed primarily to determine the answer to three questions:*Does the seller have a saleable interest in the property?...
es 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
Fee simple
In English law, a fee simple is an estate in land, a form of freehold ownership. It is the most common way that real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved...
available for the true owner. The person who is owner of real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
with paramount title has the higher (or better, or "superior") right in an action to Quiet title
Quiet title
An action to quiet title is a lawsuit brought in a court having jurisdiction over land disputes, in order to establish a party's title to real property against anyone and everyone, and thus "quiet" any challenges or claims to the 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.
A Quiet title
Quiet title
An action to quiet title is a lawsuit brought in a court having jurisdiction over land disputes, in order to establish a party's title to real property against anyone and everyone, and thus "quiet" any challenges or claims to the title....
action is a lawsuit to settle competing claims or rights to real property, for example, missing heirs
Missing heirs
A missing heir is a person related to a decedent , or testator of a will, but whose residence, domicile, Post office, or other address is not known...
, tenants, reverters, remainders
Remainder (law)
A remainder in property law is a future interest given to a person that is capable of becoming possessory upon the natural end of a prior estate created by the same instrument...
and lien holders
Lien
In law, a lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation...
all competing to get ownership to the house or land. Each of the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
have different procedures for a quiet title action.
However, most personal property
Personal property
Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...
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
Good faith
In philosophy, the concept of Good faith—Latin bona fides “good faith”, bona fide “in good faith”—denotes sincere, honest intention or belief, regardless of the outcome of an action; the opposed concepts are bad faith, mala fides and perfidy...
purchaser will normally convey title if no document is required.
Political issues
CaliforniaCalifornia
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
prevented aliens (mainly Asians
Asian people
Asian people or Asiatic people is a term with multiple meanings that refers to people who descend from a portion of Asia's population.- Central Asia :...
) from holding title to land
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
until the law was declared unconstitutional
Constitutionality
Constitutionality is the condition of acting in accordance with an applicable constitution. Acts that are not in accordance with the rules laid down in the constitution are deemed to be ultra vires.-See also:*ultra vires*Company law*Constitutional law...
in 1952. 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 IIIGeorge III of the United Kingdom
George III was King of Great Britain and King of Ireland from 25 October 1760 until the union of these two countries on 1 January 1801, after which he was King of the United Kingdom of Great Britain and Ireland until his death...
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.
In the United States Indian title is the subservient title held by Native Americans in the United States
Native Americans in the United States
Native Americans in the United States are the indigenous peoples in North America within the boundaries of the present-day continental United States, parts of Alaska, and the island state of Hawaii. They are composed of numerous, distinct tribes, states, and ethnic groups, many of which survive as...
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.
See also
- Chain of titleChain of titleA chain of title is the sequence of historical transfers of title to a property. The "chain" runs from the present owner back to the original owner of the property. In situations where documentation of ownership is important, it is often necessary to reconstruct the chain of title...
- FeeFeeA fee is the price one pays as remuneration for services. Fees usually allow for overhead, wages, costs, and markup.Traditionally, professionals in Great Britain received a fee in contradistinction to a payment, salary, or wage, and would often use guineas rather than pounds as units of account...
- FeuFeuFeu was previously the most common form of land tenure in Scotland, as conveyancing in Scots law was dominated by feudalism until the Scottish Parliament passed the Abolition of Feudal Tenure etc. Act 2000...
- Land ownership and tenure
- Land tenureLand tenureLand tenure is the name given, particularly in common law systems, to the legal regime in which land is owned by an individual, who is said to "hold" the land . The sovereign monarch, known as The Crown, held land in its own right. All private owners are either its tenants or sub-tenants...
- Phase I Environmental Site AssessmentPhase I Environmental Site AssessmentIn the United States, an environmental site assessment is a report prepared for a real estate holding which identifies potential or existing environmental contamination liabilities. The analysis, often called an ESA, typically addresses both the underlying land as well as physical improvements to...
- Manufacturer statement of origin
- Vehicle titleVehicle titleIn the United States, the certificate of title for a vehicle is a legal form, establishing a person or business as the legal owner of a vehicle. Vehicle titles in the U.S...