Many equate “title” with “ownership” of property. There is a subtle distinction: ownership represents the bundle of property rights one acquires when purchasing property. Title is the evidence of a person’s right to assert or enjoy those property rights.
It is only the ability to dispose of property that can convert ownership into money. This is where title becomes important; to be able to convert ownership of property to money, title must be marketable – that is, of such quality that a willing purchaser will accept or that an unwilling purchaser could be compelled to accept. For more information on marketability, check out our previous blog:
THE DEFINITION OF MARKETABILITY AND INSURABILITY (… AND IT’S EMBARRASSING!)
Interestingly, with respect to the bundle of property rights that a person is able to assert, the existing political philosophy of a society will affect the extent to which the holder of title may exercise those privileges. As a society becomes more regulated, greater limitations are imposed upon the exercise of ownership. For instance, in the United States, several aspects of one’s bundle of rights are reserved to the federal, state and local governments. These include the power to tax, to police (through zoning, subdivision and environmental ordinances), and to condemn (eminent domain).