Legal Definitions - color of title

Color of Title refers to a situation where a person holds a document, such as a deed, that appears to grant them legal ownership of a piece of property, but which is actually defective or invalid for some reason. This document gives the impression of a legitimate claim to title, but due to an underlying flaw, it does not legally transfer true ownership. Essentially, it's an apparent claim to property that looks valid on the surface but is legally incomplete or flawed.

Here are some examples illustrating "color of title":

• Example 1: Forged or Unauthorized Signature

  Imagine a scenario where a person, unaware of any wrongdoing, purchases a vacant lot and receives a deed. Unbeknownst to the buyer, the individual who sold them the property and signed the deed was not the true legal owner; they had forged the signature of the actual owner or misrepresented their authority to sell. In this case, the buyer's deed, while appearing legitimate, only provides them with color of title. It looks like a valid transfer document, but because the seller lacked the legal right to convey the property, the deed is fundamentally defective and does not transfer actual legal ownership.

• Example 2: Defective Property Description

  Consider a situation where a developer sells a parcel of land to a new homeowner. The deed provided to the homeowner contains a significant error in the legal description of the property, perhaps describing an adjacent lot or having boundaries that don't close properly. The homeowner believes they own the land as shown on the ground, and the deed looks like a standard property transfer document. However, due to the flawed legal description, the deed does not accurately or legally convey the intended property. This deed grants the homeowner color of title because it appears to transfer ownership, but the defect in the description prevents it from being a fully valid and enforceable legal title to the specific land they believe they purchased.

• Example 3: Improperly Executed Deed

  Suppose a family sells their vacation cabin, and the buyer receives a deed that looks perfectly official. However, due to an oversight, the deed was never properly notarized or witnessed according to the specific legal requirements of the state where the cabin is located. The buyer takes possession and acts as the owner, relying on the deed. While the document itself appears to be a valid transfer, the failure to meet the necessary legal formalities for its execution means the deed is technically defective. Therefore, it only provides the buyer with color of title, as it gives the appearance of ownership without fully satisfying all the legal prerequisites for a complete and unchallengeable transfer of legal title.