Property Ownership
What is 'equitable title' versus 'legal title' in a Rhode Island real estate transaction?
ALegal title and equitable title are the same thing
BEquitable title is the beneficial interest held by the buyer under a purchase contract (right to own); legal title is full ownership conveyed by deed at closing✓ Correct
CEquitable title is held by the lender; legal title is held by the borrower
DEquitable title applies only to commercial properties
Explanation
Under a purchase contract, the buyer acquires equitable title—the right to compel conveyance of the property. The seller retains legal title until the deed is delivered at closing, at which point legal title transfers to the buyer.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
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