contracts
legal title
Legal title is the full, formal ownership of property, including the right to possess, use, and transfer it, as shown by a deed. Legal title is distinguished from equitable title, which is an interest giving a person the right to obtain legal title in the future. Under a purchase contract or land contract, the seller keeps legal title while the buyer holds equitable title until the deal is completed.
- Exam tip
- Exams often ask who holds which title: under a land contract, the vendor keeps legal title and the vendee has equitable title until paid in full. In title-theory states, the lender or trustee may hold legal title.
- Example
- A buyer under a land contract pays monthly for 10 years. The seller holds legal title throughout and delivers a deed only after the final payment.
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Last verified: 2026-10-23