Overreaching interest
Encyclopedia
Overreaching Interest is a term in English land law
.
Overreaching can only exist where a trust
is in existence and a property is sold. The occupiers of a property in such a situation cannot then claim that their occupation of the property is an overriding interest
, as the joint trustees have brought that occupation to a close through the sale of the property.
By purchasing the property from trustees, under Section 2 of the Law of Property Act 1925
, the occupation rights of any other party are automatically extinguished. If such a party claims an overriding interest in the land, that interest is converted by attaching a monetary interest to the land - eg a purchase price, and the interest claimed by the party is 'overrreached', this conversion is often referred to as the doctrine of Equitable conversion
.
If only one owner exists, then there is a risk that a third party could claim occupation, and overreaching cannot apply.
The issues of overreaching and overriding interests are often closely linked, and the case of Birmingham Midshires v Sabherwal
examined both issues.
English land law
English land law concerns the law of real property in England and Wales. Because of its heavy historical and social significance, land is a major part of the wider English property law....
.
Overreaching can only exist where a trust
Trust law
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
is in existence and a property is sold. The occupiers of a property in such a situation cannot then claim that their occupation of the property is an overriding interest
Overriding interest
Overriding interest is an English land law concept. The general rule in registered conveyancing is that all interests and rights over a piece of land have to be written on the register entry for that land, otherwise, when anyone buys that piece of land, the interests won't apply to the purchaser,...
, as the joint trustees have brought that occupation to a close through the sale of the property.
By purchasing the property from trustees, under Section 2 of the Law of Property Act 1925
Law of Property Act 1925
The Law of Property Act 1925 is a statute of the United Kingdom Parliament. It forms part of an interrelated programme of legisation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The programme was intended to modernise the English law of real property...
, the occupation rights of any other party are automatically extinguished. If such a party claims an overriding interest in the land, that interest is converted by attaching a monetary interest to the land - eg a purchase price, and the interest claimed by the party is 'overrreached', this conversion is often referred to as the doctrine of Equitable conversion
Equitable conversion
Equitable conversion is a doctrine of the law of real property under which a purchaser of real property becomes the equitable owner of title to the property at the time he/she signs a contract binding him/her to purchase the land at a later date...
.
If only one owner exists, then there is a risk that a third party could claim occupation, and overreaching cannot apply.
The issues of overreaching and overriding interests are often closely linked, and the case of Birmingham Midshires v Sabherwal
Birmingham Midshires v Sabherwal
Birmingham Midshires Mortgage Services Limited v Sabherwal [2000] 80 P&CR 256 is an English property law case, concerning the principles of equitable interests, overriding interests, and overreaching interests...
examined both issues.