Equitable interest is an interest held by virtue of an equitable title, which is a title that indicates a beneficial interest in property and gives the holder the right to acquire formal legal title. In some cases, it is the interest held by a person who has agreed to purchase but has not yet closed the transaction. It is required to be disclosed in the MLS when it occurs.
In short, equitable interest means a seller’s ownership may not be complete. It’s a fairly broad term that covers an interest established through rules of fairness not legal assignment of ownership.
Ownership laws are not always clear-cut. The seller of the property sometimes is not always the legal possessor of the property named on the deed. Legally, the title can belong to two separate parties. An example of this, would be a trust or marital investments. These examples can be important reasons for running title reports.
Equitable interest is a financial interest. In its simplest form it means an individual holds no title yet enjoys the benefits and privileges of property ownership.
Be sure you know ARMLS Rule 8.10 which covers equitable interest as it must be disclosed when Adding a Listing into Flexmls. You can review additional information by clicking the question mark by the Equitable Interest option.
You can search in Flexmls for equitable interest and other listing conditions in the Special Listing Conditions field; which is an and/or/not function.
