Under a Land Contract, the buyer holds the “equitable title” to the land until they have paid the full purchase price. The equitable title is the right to build equity and eventually acquire the legal title to a property. The legal title, also known as the property title, is the absolute ownership of a piece of real estate and can only be transferred with a property deed, such as a Quitclaim or Warranty Deed.
So, although a buyer does not have the legal title while making payments, they have the right to obtain it once the terms of the Land Contract have been fulfilled.
While holding the equitable title, the buyer has the right to possess the property physically. The equitable title can be thought of as the right to enjoy the property.
They also have the right to benefit from any appreciation of the property’s value. For example, if a property doubles in worth one month after a buyer and seller execute a Land Contract, the buyer has the right to obtain it and benefit from the property appreciation. The seller cannot back out of the deal or change the original agreed-upon purchase price.