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| Property law |
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| Part of thecommon law series |
| Types |
| Acquisition |
| Estates in land |
| Conveyancing |
| Future use control |
| Nonpossessory interest |
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Higher category:Law andCommon law |
Inproperty law,title is an intangible construct representing abundle of rights in (to) a piece ofproperty in which a party may own either a legal interest orequitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formaldocument, such as adeed, that serves as evidence ofownership.Conveyance of the document (transfer of title to the property) may be required in order to transfer ownership in the property to another person. Title is distinct frompossession, aright that often accompanies ownership but is not necessarily sufficient to prove it (for examplesquatting). In many cases, possession and title may each be transferred independently of the other. For real property,land registration andrecording provide public notice of ownership information.
Possession is the actual holding of a thing, whether or not one has any right to do so. Theright of possession is the legitimacy of possession (with or without actual possession), evidence for which is such that the law will uphold it unless a better claim is proven. Theright of property is that right which, if all relevant facts are known (and allowed), defeats all other claims. Each of these may be in a different person.
For example, suppose A steals from B something that B had previously bought in good faith from C and that C had earlier stolen from D and that 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 anapparent right of possession (as evidenced by the purchase), D has theabsolute right of possession (being the best claim that can be proven), and the heirs of E, if they knew it, would have the right of property, which they however could not prove. A good title consists of the combination of 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 ofstatutes of limitations. Otherwise, title to property would always be uncertain.
Atcommon law,equitable title is the right to obtain full ownership ofproperty, where another maintains legal title to the property. 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 of these concepts were adopted by the various states upon their creation except, possibly, those based upon EuropeanCivil Law, such asLouisiana. Most states have merged the law and equity courts into a single court system, although there may still be law and chancery divisions in some of the systems.
When a contract for the sale of land is executed, equitable [interest/title] passes to the seller to the buyer. When the conditions on the sale contract have been met, legal title passes to the buyer in what is known asclosing. InEngland and Wales, the terms "purchaser" and "vendor" are used.[1] 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 an equitable interest in the property. When an executor or administrator qualifies, that person acquires the 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 the "perfect title", often referred to as marketable title.
Legal and equitable title also arises intrust. In a trust, one person may own the legal title, such as thetrustees. Another person may own the equitable title such as thebeneficiary.[2]
In countries with a sophisticatedprivate property system, documents of title are commonly used forreal 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 automobilejunk orsalvage title. In the case ofreal estate, the legal instrument used to transfer title from one person or entity to another is via thedeed. A famous rule is that a thief cannot convey good title, sotitle 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 bytitle insurance) is required under the law as a part of ownership transfer.
Paramount title is the best title infee simple available for the true owner. The person who is owner ofreal property with paramount title has the higher (or better, or "superior") right in an action toquiet title. This concept is inherently a relative one. Paramount title is not always the best (or highest) title, since it is necessarily based on some other person's title.[3][4]
Aquiet title action is a lawsuit to resolve with anycloud on title, such as competing claims or rights to real property, for example,missing heirs,tenants,reverters,remainders andlien holders all competing to get ownership to the house or land.[5][6] 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 theUnited States have different procedures for aquiet title action.[7]
However, mostpersonal 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. The transfer of possession to agood faith purchaser will normally convey title if no document is required.
Development andsubdivision ofreal estate property may occur while its title isunder dispute from another party. If a suit is resolved in favor of aplaintiff, this renders uncertain the circumstances that allowed the said development to occur, and may result in the resources invested going to waste.[8]
The case ofPaxton v. Virata et al., wherein aforgery of a title led to the establishment of the Viva Homes Estateresidential subdivision inDasmariñas,Cavite, in thePhilippines, has turned an entiregated community aninformal settlement, making residents who have invested decades intonull and void titles worried aboutdemolition.[8][9][10]
InUnited States law, evidence of title is typically established through title reports written up bytitle insurance companies, which show the history of title (property abstract andchain of title) as determined by the recorded public recorddeeds;[11] the title report will also show applicableencumbrances such aseasements,liens, orcovenants.[12] In exchange forinsurance premiums, the title insurance company conducts atitle search through public records and provides assurance of good title, reimbursing the insured if a dispute over the title arises.[13] In the case of vehicle ownership, a simplevehicle title document may be issued by a governmental agency.
The main rights in the title bundle are usually:
The rights inreal property may be separated further, examples including:
California prevented aliens (mainlyAsians) from holding title toland until the law was declaredunconstitutional in 1952.[14] Currently there are no restrictions onforeign ownership of land in the United States, although sales of real estate by non-resident aliens are subject to certain special taxation rules.
Prior to the establishment of the United States, title to Indian lands in lands controlled by Britain inNorth America was governed by the Royal Proclamation of October 7, 1763. This proclamation byKing George III reserved title in land to the Indians, subject to alienation only by the Crown. This continued to be thelaw of Canada following the American Revolution.[15]
In the United States, Indian title is the subservient title held byNative Americans in the United States to the land they customarily claimed and occupied. It was first recognized inJohnson v. McIntosh, 21 U.S. (8Wheat) 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 bytreaty.[16]
The "purchaser" and "vendor", in relation to a land transaction, are ... the person acquiring and the person disposing of the subject-matter of the transaction
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