What does "equitable title" refer to?

Equitable title refers to the interest held by a buyer in a property under a purchase contract, even before the formal legal title is transferred to them. This concept is significant in real estate transactions because it provides the buyer with certain rights to the property. While they may not yet have legal title, the equitable title allows the buyer to benefit from ownership, such as living in the property or making improvements, and it gives them a claim against the seller for the fulfillment of the contract terms.

The essence of equitable title lies in the relationship between the buyer and the property—they have a vested interest that allows them to eventually receive legal title once the transaction is completed. Understanding this distinction is crucial for those involved in real estate transactions and title insurance, as it impacts both the rights of the buyer and the obligations of the seller.