Equitable Title

In depth

Equitable title is the bundle of ownership rights a buyer holds while the seller still has legal title, typical of contract for deed and lease-purchase arrangements. The equitable owner has the right to possess, use, and enjoy the property, plus the right to compel conveyance upon performance. Misconception: equitable title is not a lesser form of ownership; it is enforceable in court through specific performance. Practically, equitable title gives a contract-for-deed buyer protection against the seller's later attempts to sell or encumber the property to others, especially when a memorandum is recorded. The IRS often treats equitable title holders as owners for property tax and depreciation purposes. Many states recognize equitable mortgages, requiring foreclosure-like procedures rather than simple forfeiture.