DEFINITION of Title
A title is a legal document that espouses an individual's right to ownership and possession of an item that can be recognized as being owned or belonging to a person or a thing. At a basic level, a title is a document that indicates recognition of ownership. In a government system that acknowledges individual property rights, an individual is capable of having ownership over an expansive amount of tangible and intangible property. Titles can be obtained by purchase, descent or grant.
BREAKING DOWN Title
Three components apply to the concept of a title: apparent ownership, occupation or possession and the right of possession. While there are various types of titles, there are two which are most commonly obtained: personal property titles and real property titles.
Personal Property Titles
Titles to personal property allow individuals the rights to own things that don't fall under the real property category. It also includes all rights or interests in movable things.
Personal property is generally divided into two dominant categories. The first category involves corporeal personal property, meaning all property that is tangible or material. This includes items such as merchandise, jewelry and animals. The second category involves incorporeal personal property, meaning items that are not necessarily material or tangible. This includes items such as copyrights, patents, bonds and stocks.
Real Property Titles
Different from personal property, real property – like cars and real estate – is provided a title that conveys ownership. Whenever an asset is sold, the title is transferred to the buyer. All personal property that is sold or traded must be freed of liens and other debts before the property can be transferred to another party.
Real estate ownership, or titles, may take one of several different forms. Primary forms of real estate ownership include:
- Tenancy in common, which involves two or more individuals who jointly hold a real estate title. Tenants in common hold a title, individually, for their respective piece of the property. Each individual can transfer or encumber his title. Ownership can also be willed to another party.
- Tenants by entirety, in which a title is given to a legally married husband and wife, treating the couple as one individual. If one spouse dies, the title is transferred to the living spouse in entirety.
- Joint tenancy, which involves two or more individuals holding a real estate title jointly, where each individual has equal rights to the property during his lifetime.
- Community property, a form of ownership by a married couple with the intention of owning property together during the marriage. Both spouses have the right to sell or transfer half of the property or will it to another individual. Aside from real estate, all property acquired during the marriage is deemed community property.
- Sole ownership, which is characterized by a legal individual or entity that holds a title. Typically, sole owners are single men and women, married men or women holding property apart from their spouses, and businesses with structuring that allows for investing in real estate.