Practical Law Glossary Item 8-581-5965 (Approx. 3 pages)
A beneficial interest in real property that gives the title holder the right to acquire legal title to the property. Equitable title holders cannot transfer legal title to real property, but they derive benefits from the property's appreciation in value.
In the context of an acquisition of real property, the purchaser holds equitable title to the property from the date the purchase and sale agreement is executed, although legal title is not transferred until the deed to the property is transferred from the seller to the purchaser.
Equitable title is also seen in states where lenders secure loans on real property with deeds of trust instead of mortgages. Although a borrower retains equitable title to the property throughout the pendency of the loan, it relinquishes legal title to the property to a third-party trustee until the loan is fully repaid to the lender.