A title is a legal document proving ownership of a property or asset. A title can represent ownership of tangible or intangible property or assets, such as a car or a trademark.
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A title may indicate the ownership of property rights by an individual or business, which is the ownership of tangible (physical) or intangible resources. Titles can be acquired through purchase or inheritance.
It is essential that a title company perform a title search to ensure that there are no liens, delinquent taxes, or other title issues that would prevent the sale of the asset.
Understanding About Titles
The concept of a title comprises three components: ownership, occupation or possession, and the right to possession. Personal property titles and real property titles are the most commonly obtained types of titles, although there are many others.
Personal Property Titles
Personal property titles grant individuals the right to possess items that do not qualify as real property. Also included are all rights or interests in movable property.
Personal property generally falls into two categories: tangible and intangible. The first category includes corporeal personal property, or all tangible or material property. This includes merchandise, jewellery, and even animals. The second category of personal property consists of incorporeal items, which are not necessarily material or tangible. This category includes copyrights, patents, bonds, and stocks.
Real Property Titles
Real property, including automobiles and real estate, is provided with a title that conveys ownership. When an asset is sold, ownership is transferred to the purchaser. Before it can be transferred to another party, all sold or traded personal property must be free of liens and other debts.
In other words, the title must be clear, meaning that there are no creditors claiming ownership due to a borrower's credit. A clear title indicates that the owner's claim to the property or asset is uncontested. If the title is unclear, it may be deemed a bad title, as there may be outstanding liens, unpaid taxes, or unresolved building code violations.
It is essential that a title company perform a title search to ensure that there are no liens, delinquent taxes, or other title issues that would prevent the sale of the asset.
• A title is a legal document proving ownership of a property or asset.
• A title can signify ownership of a tangible asset, such as a car, or an intangible asset, such as a trademark.
• A title may indicate ownership of property rights by an individual or business, which is the ownership of tangible (physical) or intangible resources.
Types of Real Estate Titles
Real estate ownership, or titles, can take on a variety of forms. Principal types of real estate ownership include
Tenancy in common
In which two or more individuals hold the title jointly. Individual titles are held by tenants in common for their respective portions of the property. Each person has the ability to transfer or encumber their title. Additionally, ownership can be bequeathed to another individual.
Tenants by entirety
This is a title which conveys ownership to a legally married husband and wife as a single entity. If one spouse passes away, the entire title is transferred to the surviving spouse.
Joint tenancy
Where two or more individuals hold a real estate title jointly and have equal rights to the property throughout their lifetimes.
Community property
This is a form of ownership in which a married couple intends to own property jointly during their marriage. Both spouses have the right to sell, transfer, or bequeath their share of the property. With the exception of real estate, all property acquired during the marriage is considered to be community property.
Sole ownership
Characterized by a legal person or organization holding a title. Typically, sole proprietors are either unmarried men and women or married men and women who own property separately from their spouses. Businesses may also hold sole ownership if their organizational structure permits real estate investment.
Types of Car Titles
Depending on the car's status, it may have a clear title or a bad title, similar to real estate, as well as other types of titles.
Junk title
A junk title is issued when a vehicle is sold to a junk dealer for destruction or disassembly.
Reconstructed title
An insurance company may issue a reconstructed title for a damaged vehicle that has been substantially rebuilt. Automobiles with a rebuilt title may be driven, but they must be inspected to ensure that they are drivable. However, the insurance company may impose monetary limitations on the amount they will cover for vehicles with rebuilt titles.
Example of a Title
Sam sold his automobile and must now transfer the title to the new owner. Sam contacts his local Department of Motor Vehicles (DMV) to obtain the title transfer fees and forms. Sam generates a bill of sale detailing the sale of the automobile to the buyer and the selling price. Sam also signs the title over to the buyer to demonstrate the transfer of ownership.
Sam's property can only be transferred if he has no auto-lender liens or tax arrears. The buyer takes the vehicle's title and bill of sale to the local DMV to register the vehicle. The purchaser would be issued a new title.
Please note that your local DMV may have additional forms, requirements, and fees for the purchase and sale of a vehicle.
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