Title (property)

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. 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.

A title, according to property law, is the summation of rights that a property owner has on a property. The property owner might have either an equitable interest or legal interest in a property. The bundle or summation of rights a property owner is vested with can be unbundled and held by various other parties.

Title can also refer to a deed or any other formal document that indicates evidence of a party’s ownership of a property. Conveyance or passing of said document in some instances is necessary if the property owner intends on transferring full ownership of the real property to another party. Title of a property is different from possession of a property. Possession is more of a right that comes with title ownership. In certain situations, title and possession can be passed to a new property owner separately.

The major rights passed to a property owner upon receiving title include;

  • Exclusive possession: Exclusive possession infers that the property owner has a right to enjoy his/her property without the interference of outside parties.
  • Exclusive use and enclosure: This means that the property owner has a right to fence of the property and use it to the exclusion of all other persons. Enclosure can be accomplished by purchasing a property’s rights and all common rights in order to enjoy exclusive usage.
  • Conveyance, including by bequest: Conveyancing under common law can be described as the transferring of a real property’s legal title from one individual to another.
  • Access easement: This provides a property owner access from a public right of way to a piece of real property.
  • Hypothecation: This is a legal term that describes a borrower granting a hypothec to a lender. This is possible only if the genuine title holder of the property is the borrower. The borrower pledges his/her real estate asset as collateral for a loan, but retains actual ownership of the property.
  • Possession: This means the actual holding of a property, regardless of if the holder is the rightful owner or not. For example, a person physically residing on a property can claim possession, but the actual holder of the title to the property is the true owner.

With or without actual possession, the right of possession is the legitimacy of possession, and the law of the land will uphold it unless a better claim is proven.

Equitable title versus legal title

Under common law, equitable title refers to a property owner’s right to acquire full and uncontested ownership of property, while another party holds on to the legal title of the real estate property.

Upon the execution of a contract for the sale of land, the equitable title of a property will be passed to the purchaser/buyer. It is only when all the conditions concerning the contract of sale have been satisfied that legal title will then also pass to the buyer – this is referred to as closing.

Ownership of a property is not fully had until legal title has been passed. Actual ownership is received only after the property has been fully paid for by the buyer to the seller, and a deed or title has been recorded according to stipulated law.

Are there different types of residential property titles?

The title of a property can be categorised according to the quality of the title. A title’s quality is determined by the land registry’s Registrar as at the time an application is made for the first time to register an interest in title.

There are various forms of residential property title, namely; absolute title, possessory title, qualified title, and good leasehold property

What is Absolute Title?

Most title holders or property owners have an ‘absolute’ title to their property, this implies that their title is practically perfect. This sort title is often granted to land owners with a freehold interest in land. Although, the person who is vested with the legal estate has all the appurtenant rights, he is subject to:

The Land Registry’s Registrar can perfect a property’s title by ignoring minor defects in an ownership claim and granting an absolute title. Upon the registration of a land owner’s interest in land at the registry, the vested title becomes guaranteed by the State. But said guarantee can be subject to covenants and easements attached to the land which can which can make a real property unsuitable for a buyer. This means that an absolute title in land doesn’t necessarily imply that a property owner’s title is perfect.

What is Possessory Title?

Possessory titles are rare but it can occur on either a leasehold or freehold property. A property owner is vested with possessory title if property ownership is subject to the provision that there could be an adverse or competing interest on the property as at the time it was originally registered. Such can occur if the property owner has lost evidence of his/her title deeds prior to title registration. But after the passing of a stipulated time period, such a title can be perfected and made into an absolute title.

What is Qualified Title?

In the event the land registry’s Registrar notices a title defect during the registration of a title, such a title can be registered under this class if the registrar feels the defect is too great to overlook. This class of titles are also rare. Such titles usually become created after it is noticed at the registry that the transaction is in breach of trust that concerns the title. Thus, the title owner will only be vested with interest that is subject to the interest of other beneficiaries of the property.

What is Good Leasehold?

This will be granted if the Registrar is satisfied concerning the title of only the leaseholder but not the freeholder, thus making this class of title applicable only to leasehold properties. For it to occur, the registrar must be satisfied that the leasehold title of the applicant is sound.

This sort of title is granted only if the freehold property has been previously registered but not under an absolute title. Good leasehold titles are very rarely accepted by lenders.

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Published on 6th June 2017

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