What Is a Legal Title?
Legal titles are essentially honored designs conferred by the government which extend full substantiation of authenticity to the document in question. These titles are not to be confused with standard titles which are issued by manufacturers and merchants and do not carry the same legal significance in court proceedings. Legal titles are used extensively in court reports, public records, and judicial proceedings. Legal titles also provide evidence of authenticity and are executed according to various specified protocols which may require special witnesses.
When a legal title is attached to a document it is accepted by the court as an unquestionable form of legitimacy. Such titles will only be considered legitimate when the official signatures, notaries, and stamps are attached according to set statutory conditions . Legal titles also supersede regular titles if they are dated prior to any regular titles regarding the same item. Legal titles written in a language other than the court’s working language is accepted as long as they have been translated, under oath, by a registered translator who has placed his or her stamp on the translation which must accompany each document.
Legal titles provide proof of the following: The primary objective of legal titles is for the purpose of creating record receipts for the accurate tracking of sensitive information and for the exact identification of the lawful owners of goods, possessions, and other belongings. If legal titles are not issued appropriately, sold items could be suspected of being stolen and could therefore be held officially in custody by the police until proven otherwise. Such improper use of legal titles could be prosecuted in a court of law.
Types of Legal Titles
Legal titles exist in numerous forms. Most people are likely familiar with a title to property, or a deed. A property title is a legal document that grants the holder ownership over that property. It is proof that you own it, and generally provides the right to control, exclude others from, and/or sell the property, among other things. Essentially is entitles you to exclusive possession over it. This is separate from the deed, which is actually the physical title that proves your ownership of the property. Businesses also have legal titles. When a business incorporates, for instance, they get a corporate title. This is somewhat separate from an official position such as CEO, however for all intents and purposes it essentially allows the owner to represent the business as a whole, including as the registered agent responsible for receiving service of process (lawsuits, etc.) to the business. Similar to this is a title that is given by a birth family. A child born to married parents has the title "child" of those parents from birth, for example. It is most often used in the context of termination of parental rights proceedings because it’s effectively an official record that the person is that parent’s biological child, and makes the biological parent legally responsible for ongoing child support for the child’s minority. There are also professional titles: "partner," "associate," "attorney," "counsel," "secretary," "chief," etc. These can have different meanings depending on the context, but are generally used to mean you are allowed to represent your employer, and employers generally have the legal title to the work done by their employees.
Legal Titles and Property Ownership
Obtaining a legal title is the main purpose of any property purchase, and it is documents concerning the title that a solicitor checks over to help clients get a clear picture of what they own. A legal title is a legal document that indicates who owns a given real estate property, out of physical possession of any structures that are on the land or who co-owns it. It will often describe the boundaries of that property and how much of it another party owns. A legal title has distinct implications for the buyer of a property as to what they can do with their portion of the land, and how it might impact what they can do with any structures on that land. It can be a crucial factor in preventing sudden issues with the local council, particularly over permission for construction or alterations on the property. As mentioned, the main purpose of property purchase is obtaining a clear legal title.
A legal title allows its holder to:
A legal title is not transferable—if a legal title of a property is sold, a new one is registered for the new owner. Legal titles are maintained by the Land Registration Authority, which is the administrative body that keeps land registries regarding property in the UK. When a property is sold, it’s the Land Registration Authority that provides all of the documentation needed for the new owner to register their own legal title. The Land Registration Authority then creates a new legal title for the property based on the information supplied in the documentation. Various documents are needed to transfer a legal title, including an application form provided by the Land Registration Authority, an ID check for the buyer, documentation for payment of fees, information about the sale, documentation about the seller and others with a legal mobility issue, in addition to information about any additional property being sold alongside it. These documents are filed with the local Land Registration Authority offices in the area where the property is located before the title can be transferred to the new owner. However, the local Land Registration Authority still needs to approve it. Therefore, it’s important for both the transferor and the transferee to double-check these documents before filing them, and it’s highly recommended to consult a property solicitor at this stage so all of the proper details have been supplied.
Legal Titles in Business and Corporate Law
Legal titles also play an important role in the realm of business, including corporations, partnerships, limited liability companies, and many others. Once again, since these corporate entities are separate and distinct from their owners, the corporation will generally be the signatory to contracts, leases, and other legal documents that the entity enters into, rather than the individual who owns the corporation. These owners (and other officers of the corporations) may sign "on behalf of" the corporation to indicate that the corporation is the party to the document. By signing this way, the officers and owners are indicating that they have the authority to enter into the transaction on behalf of the corporation; if they do not have the authority, lawsuits can quickly follow. For example, take a look at a typical bank resolution as follows: RESOLVED, that effective immediately [name of officer] be and is hereby authorized to open a bank account in the name of [name of corporation] in any bank . . . , and to execute and deliver to [name of bank] a deposit account agreement with respect to said deposit account, and to endorse checks and other orders for the payment of money; and it is RESOLVED FURTHER, that the [ titles of office] of [name of corporation] shall have, and hereby are granted, full power and authority in all matters to do and perform any and all acts and things requisite and necessary to carry out and fully effectuate the foregoing. Any one signer signing alone will be deemed to be acting on behalf of the corporation. The resolution appoints an officer, and sets forth which positions have the authority to carry out the tasks detailed in the resolution. The resolution also indicates that any one signatory signing on the corporation’s behalf can act alone; it does not require that two officers sign a document on behalf of (for) the corporation (although it could). The corporations may have other resolutions that require two officers to sign legal documents on behalf of the corporation or limit the officer’s approval authority (e.g., under a certain dollar amount may not need an officer’s approval). The primary point to remember with regard to legal titles in a corporate context is that they are meant to denote officers and other individuals who have a specific role in the governance of the corporation and set forth the limitations of those individuals’ role within the corporation.
Obtaining Legal Title
In order to become the holder of a legal title, which is the authorized representative of the state’s interest in a thing, one must fulfill several legal requirements. The individual or entity must be legally recognized as eligible for the acquisition, possession and transfer of property of the type being considered. The eligibility may be based on fulfilling specific conditions, such as being a citizen or resident of a particular state or country, being of a stated age, or satisfying other criteria.
Once eligibility has been established, the next step is an evaluation of the process for acquiring the desired legal title. In some cases, this is accomplished through existing procedures, such as the sale of real estate at a public auction, where the successful bidder becomes the holder of the subject legal title . If there is not an existing procedure, such as an available public auction, other procedures may be employed at the direction of the proper authority for the subject thing.
This may involve appointing a person, company or governmental entity to serve as trustee over the thing, or granting temporary custody and control of the thing to a person or security company while establishing the acquisition procedure. In addition, the authority charged with creating the acquisition procedure may establish an application process for granting legal title. When properly implemented, this can help ensure that legal title is only awarded to those who are legally eligible.
Resolving Legal Title Disputes
Legal title disputes often arise in commercial real estate transactions. Sometimes it is due to the fact that the premises are already subject to a lease or occupancy agreement or in other cases tenants will seek to claim an interest in property within a building that they occupy even in the absence of a formal lease or other agreement. In any such event, legal and practical steps can be taken to resolve the dispute prior to the anticipated closing date or in some cases the dispute itself may not rise to that level and can be resolved with minimal effort.
In respect of resolving title disputes, a tenant should provide notice to its landlord in accordance with the provisions of its lease and in most cases seek a title indemnity within its lease as a condition precedent to the landlord’s obligation to issue a lease estoppel or "SNDA" to the tenant. A lawyer representing a landlord on closing must review such legal title matters to confirm that the legal title that is being conveyed is free and clear of any defects. In the event that the title contains any encumbrances, lien or similar charge or if there are objections raised by a tenant or other party, the lawyer for the seller must review such issues in the context of the provisions of the agreement of purchase and sale (the "APS") with respect to the resolution of such issues and whether the Title Objection Date has passed. The lawyer for the seller must also advise the seller of any issues with respect to the title of the property and how such issues can possibly be mitigated. As in any real estate transaction timing and knowledge of the state of the deal can provide for an opportunity for negotiation in order to address or mitigate the issue.
In the event that there are existing tenants or occupancy rights at the property then the lawyer for the buyer must review the state of the title in the APS and in conjunction with the Form 18 (or other form prescribed under applicable provincial law) that is issued by the seller or its counsel to the buyer prior to the closing so that the buyer is advised of the status of any existing leases and tenancies.
A buyer can always take additional steps to have a tenant vacate in the event that a legal title can be secured or determine the extent of its legal interest and confirm its rights and obligations in respect of such interest. Negotiations, mediation and other forms of alternative dispute resolution can be employed effectively to resolve legal title disputes and unless there is a risk of foreclosure or other claims that put the buyer at risk, it is best practice to resolve such disputes through negotiation. The goal of resolving legal title disputes in most commercial transactions is to ensure that a buyer can avail itself fully of the property that it has contracted for and that all deals are made "as you see them" and not based on a promise to cure the title objection post-closing.
The Future of Legal Titles
As technology continues to evolve and reshape the way we do business, the future of legal titles may be subject to a number of emerging trends, including the use of blockchain. Blockchain is a digital database that contains all the information necessary to establish the title to real property. It is a public and private cooperative system that has been proven to be extraordinarily accurate and secure. Blockchain is a chain of blocks, so the name "blockchain." The blocks are hashed and contain the transaction name, date and time. They also contain the public key, which is the wallet address. It has an in-built digital summary of the whole chain. All blocks carry the address; but everyone contributing is able to read it. The outcome makes the authentic ownership clear and unequivocal. You can’t forge the chain because the transaction would not be joined properly. Everybody has the same record of it. Thus, no mistrust can develop in the chain .
The immutable nature of blockchain contributes to its security. Anyone attempting to hack it would need to change the whole system, essentially the banks. How feasible is that? Blockchain is decentralized, meaning it occurs worldwide. Thus, it is impossible to manipulate as a hacker would need to hack every computer and every country at once. Also, no one person or entity solely controls the blockchain database. Therefore, it is not the equivalent of a bank database that can be altered and manipulated by a hacker.
Blockchain is becoming the next step in a progression of computerization that began with the advent of computer record systems, then onto laserfiche and now blockchain. Blockchain is difficult for governments, for example, to manipulate, since it is designed to remove central control. However, there is little doubt that blockchain will inevitably dominate the management of legal titles in future transactions.