Equitable conversion: During pendency, who holds equitable title, who holds legal title, and who bears risk of loss, absent the seller's negligence?

• A. Buyer holds equitable title; seller holds legal title; risk of loss on buyer unless seller negligent
• B. Seller holds equitable title; buyer holds legal title
• C. Equitable title transfers only at closing
• D. Buyer bears risk of loss regardless of actions

Answer: (A)

Equitable conversion governs ownership and risk before a real estate closing. Once a contract for sale is signed, the buyer becomes the equitable owner of the land, while the seller retains legal title to convey the property at closing. Because the buyer holds the equitable title, the risk of loss during the pendency generally falls on the buyer, unless the loss results from the seller’s negligence, in which case the seller bears the risk. So the scenario described—buyer with equitable title, seller with legal title, and the buyer bearing risk of loss unless the seller is negligent—matches the rule. The other options misstate who holds equitable title, when it transfers, or who bears risk in the absence of seller negligence.