If you plan to buy property, you’ll need to know what a title is. Bankrate explains.

What is a title?

A title document is evidence and recognition of an individual’s right to ownership of something. The term is frequently associated with real estate law, where a legal document called a deed provides evidence of the transfer of title between buyer and seller. Understanding the term makes it easier to make wise choices when investing in real estate.

Deeper definition

“Title” is the encompassing term for the rights of ownership represented by a legal document such as a title deed, bill of sale, or certificate of title. An individual with legal title has the power to control and dispose of the owned property.

More specifically, in law, the term means:

  • A form of undisputed ownership.
  • All evidence that constitutes a legal right of ownership.
  • A legal document that provides evidence of ownership.

Title most commonly relates to two distinct types of property: real and personal. Real property is immovable property, while personal property is movable and may even be intangible.

Real property has a permanently fixed location, and includes land, buildings, crops and mineral rights. Personal property is anything that isn’t real property. It includes tangible items such as furniture and vehicles, as well as intangible items such as stocks, bonds and intellectual property.

When purchasing real estate, the concept of title is an important consideration. The four main ways to hold title to real estate are solely, as a tenant in common, as a joint tenant with the right of survivorship, and as a tenant by the entirety.

Solely: When you are the sole owner of a property, you have all of the rights of an owner. You can occupy the property, lease it, sell it and bequeath it in a will.

Tenancy in common: Tenancy in common allows two or more people to jointly hold title. It’s a common form of title in business, where several partners buy investment property.

Joint tenancy with rights of survivorship: This is similar to tenancy in common. The main difference is that if one of the joint tenants dies, the remaining tenants acquire the deceased’s interest. A sole survivor becomes a sole owner.

Tenancy by the entirety: Married couples have the option of tenancy by the entirety. In this case, the law treats the couple as a single entity, and each individual is entitled to 100 percent of the interest.

Example of a title

In simple terms, a title is a legal document that represents your right of recognition as the owner of anything you can legally own, including real estate, vehicles, and intellectual property. There are different types of real estate title, and it’s important to understand the legal ramifications of each.

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