A property interest is the right or power to enforce your right over a property. There are many types of interests in property, all created under different circumstances. Depending on what type of interest you possess, you will have a unique priority right to claim or buy property.
1. Proprietary Interest
A proprietary interest is a right to own one’s property. This can consist of assets and ownership rights of a person. These assets can be physical or non-tangible, such as the right to own intellectual material, e.g. publishing rights. There are two general kinds of proprietary interests to keep in mind.
- Real Property: This involves ownership of land, typically a house of an apartment.
- Personal Property: This involves ownership of anything else which is not land. Additionally, there are two types of personal property which outline your rights in property in regard to your proprietary interest
- Chose in possession: Owning physical things such as clothes or a car. Physically possessing these choses will enforce your rights.
- Chose in action: The right to enforce possession of something through legal action. This is generally in regards to non-physical items such as intellectual property or copyright protection.
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2. Legal Interest
A legal interest is a legally enforceable right to possess or use property, and is generally used to refer to interests over land. If you have a legal interest over a property, that makes you the legal owner. You have the right of control over the property meaning that you can either sell, transfer or own the property. This legal interest must first be registered with the government in order to be enforced, generally in the form of property deeds.
A legal interest is generally the strongest property interest you can have. It is the most likely interest that will be enforced in a court where you enter a legal dispute. This is where another party contests your claim with arguments such as ‘I bought it first’ or ‘I had the first legal interest’.
3. Equitable Interest
An equitable interest can be created by trust. The beneficiary will hold a “beneficial interest” to the property, which does not amount to a full legal interest but in most cases gives them most of the rights they would have by having a legal interest.
An equitable interest is created by a court for an individual. It will arise where the legal requirements have not been fulfilled but there is enough intention to create one on behalf of both parties. Additionally, it will also be created where an individual has suffered due to another party’s actions. Therefore, you can take legal action over a property with an equitable interest as it has been created for you by a court.
It is important that you completely understand the proprietary interests you possess. This is in order to protect your rights as the potential owner. If you are unsure of your interests or have any questions, a property lawyer can advise you.
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