In an installment contract, when does the buyer receive legal title?

• A. After All Contractual Obligations Are Met
• B. Upon Signing
• C. Upon Foreclosure
• D. Immediately After First Payment

Answer: (A)

In an installment contract, title transfer follows a distinction between who holds the rights to own the property and who owns the property outright. The buyer typically has equitable title from the start—enabling possession and use—while the seller keeps legal title as security for performance. The legal title is not transferred until every obligation under the contract is fulfilled: the full purchase price is paid and any other required duties (like taxes, insurance, and maintenance) are met as specified. When those conditions are finally satisfied, the seller conveys legal title by a deed, giving the buyer full ownership. If the buyer defaults, the contract can be terminated and the seller may reclaim ownership, illustrating why the legal title remains with the seller until all terms are met.