What does the term "equitable title" refer to?

Equitable title refers to a legal claim to ownership of a property based on an agreement or contract, even when the property deed is still held by another party. This concept arises primarily in situations where the transfer of legal title has not yet occurred, such as in real estate contracts, where a buyer has agreed to purchase property but hasn't received the formal deed yet.

Equitable title grants the holder certain rights, such as the right to enjoy the benefits of the property and to have any proceeds from its sale. This distinction is important in ensuring that the buyer's interests are protected, even before the legal title is fully transferred, allowing them to act as if they are the owner.

Other options pertain to concepts that do not align with the definition of equitable title. Physical possession of property indicates actual occupancy rather than the legal claim, while a type of lease agreement refers to rental arrangements rather than ownership claims. A certificate for a mortgage is a document related to financing but does not confer any ownership rights. Thus, understanding equitable title helps clarify the rights of parties involved in property transactions and their legal standing before title transfer is complete.