contracts
equitable title
Equitable title is the interest a buyer acquires when a purchase contract is signed, giving the right to obtain legal title once the contract terms are met. Buyers under purchase agreements and installment or land contracts hold equitable title while the seller keeps legal title. In a deed of trust, the borrower also holds equitable title while the trustee holds legal title. Equitable title can be sold, inherited, or mortgaged.
- Exam tip
- Under a land contract, the vendee has equitable title and the vendor keeps legal title until paid off. Equitable title is a real, transferable interest.
- Example
- A buyer signs a land contract and moves in, paying monthly; he holds equitable title until the final payment, when the seller delivers the deed.
Related terms & state variants
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Last verified: 2026-10-23