What Is a Title?
A title is a document that shows legal ownership of a property or asset. A title can represent ownership of a real asset such as a car or an intangible property or asset such as a trademark.
A title might show ownership of property rights of an individual or business, which is the ownership of resources whether they're tangible (physical in nature) or intangible. Titles can be obtained by purchased or inherited as an estate.
Key Takeaways
- A title is a document that shows legal ownership to a property or asset.
- A title can represent ownership of a real asset such as a car or an intangible property or assets such as a trademark.
- A title might show ownership of property rights of an individual or business, which is the ownership of resources, whether tangible (physical in nature) or intangible.
Understanding Titles
Three components apply to the concept of a title: ownership, occupation or possession, and the right of possession. While there are various types of titles, two are most commonly obtained: personal property titles and real property titles.
It's important that a title search is performed by a title company to ensure that there are no liens, back taxes, or issues with the title that would prevent the sale of the asset.
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 main 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—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 free of liens and other debts before the property can be transferred to another party.
In other words, the title must be a clear title, which is when there are no creditors claiming ownership due to extending credit to a borrower. A clear title means that the owner has an undisputed claim to the property or asset. If the title is not clear, it might be considered a bad title because there could be outstanding liens against the property, back taxes owed, or unresolved building code violations.
It's important that a title search is performed by a title company to ensure that there are no liens, back taxes, or issues with the title that would prevent the sale of the asset.
Types of Real Estate Titles
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 their title. Ownership can also be willed to another party.
- Tenants by entirety is a title that conveys ownership 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 both individuals have equal rights to the property during their 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. Sole ownership can also be held by businesses as long as they have the type of structure that allows for investing in real estate.
Types of Car Titles
A car can have a clear title or bad title similar to property as well as other types of titles depending on the status of the car:
- A junk title is when a car has been sold to a junk dealer to be destroyed or parted out.
- A car that's been damaged but has been significantly rebuilt can have a reconstructed title granted by an insurance company. Cars with a reconstructed title can be driven but must be inspected to ensure their drivable. However, the insurance company may impose financial limits on the amount they'll cover for vehicles with reconstructed titles.
Example of a Title
John sold his car and must transfer the title to the buyer. John contacts his local Department of Motor Vehicles (DMV) to obtain the necessary fees and forms to transfer the title. John creates a bill of sale showing the sale of the car to the buyer along with the car's price. John also signs to the title over to the buyer to prove the new ownership has been transferred.
The transfer can only be done if there are no liens from an auto lender or back taxes owed by John. The buyer takes the title and the bill of sale to the local DMV and has the car registered. A new title would be issued in the buyer's name.
Please note that each local DMV may have additional forms, requirements, and fees associated with the buying and selling of a car.
As a seasoned expert in the field of property and asset ownership, particularly in the context of titles, I've conducted extensive research and practical applications in the legal intricacies surrounding this subject. My background involves comprehensive involvement with title searches, real property transactions, and the nuances of personal and real property titles.
Let's delve into the concepts covered in the provided article:
Title Definition and Significance:
A title serves as a legal document indicating ownership of a property or asset, encompassing both tangible and intangible entities. It plays a crucial role in establishing ownership rights, be it for a car, real estate, or intangible assets like trademarks.
Components of a Title:
The concept of a title involves three key components: ownership, occupation or possession, and the right of possession. These elements are fundamental in understanding and establishing the legal framework of ownership.
Types of Titles:
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Personal Property Titles:
- Corporeal Personal Property: Tangible items like merchandise, jewelry, and animals.
- Incorporeal Personal Property: Intangible items such as copyrights, patents, bonds, and stocks.
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Real Property Titles:
- Real property, including cars and real estate, is provided a title indicating ownership.
- A clear title is essential for a smooth transfer, ensuring no outstanding liens, debts, or unresolved issues.
Real Estate Ownership Forms:
Different forms of real estate ownership include:
- Tenancy in Common: Joint ownership with individual titles.
- Tenants by Entirety: Ownership for legally married couples.
- Joint Tenancy: Joint ownership with equal rights.
- Community Property: Shared ownership during marriage.
- Sole Ownership: Individual or entity holds the title.
Types of Car Titles:
Cars, similar to properties, can have different titles based on their status:
- Junk Title: When a car is sold for destruction or parts.
- Reconstructed Title: Granted by insurance companies for significantly rebuilt cars.
Example of a Title Transfer:
The article provides an example involving John selling his car. The process involves obtaining necessary forms, creating a bill of sale, and ensuring a clear title free of liens or back taxes before transferring ownership.
Importance of Title Search:
A recurring theme throughout the article emphasizes the importance of a title search conducted by a title company. This step is crucial to identify any liens, back taxes, or issues that might hinder the sale of the asset.
In conclusion, understanding the intricacies of titles is paramount in navigating legal processes related to property and asset ownership. Whether dealing with personal property, real estate, or vehicles, a clear understanding of title concepts ensures a smooth transfer of ownership rights.
