Under a classic land contract, the buyer takes possession and gains a beneficial ownership interest before receiving the deed. What is that interest called?
Correct Answer
B) Equitable interest
Equitable interest is correct because the facts match the buyer's beneficial interest arising from the contract even though legal title has not yet been delivered. That is the best description of the relationship, right, or legal concept tested here.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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