What is equitable conversion?

The doctrine of equitable conversion is a rule of law in real property which was created to give the buyer certain titles to the property even before the date of the acquisition’s closing date is set. The purchaser actually gains an equitable title to the real property at the time that he or she signs a contract that binds him or her to purchase the property in the near future.

Equitable title

Equitable title

The seller on the other hand retains legal title and interest in the property before the date of the transfer of ownership is arranged. But it should be noted that the seller’s interest in the land is considered as personal property. This means that the seller has the right to the payment of money, rather than the right to ownership.