Overreaching Flashcards
What is overreaching?
Overreaching means paying the purchase money to two trustees of a beneficial interest in land.
Once this is done, the equitable interests in the land transfer to the purchase money and the purchaser takes the land free of interests
What happens if overreaching does not occur?
Beneficial interests in land held under a trust can be binding on a purchaser of the land, unless they are overreached
What happens if overreaching fails?
The purchaser can be bound by the interests if the beneficiary is in actual occupation
What right does overreaching apply to?
It applies to a beneficial interest in a trust of land
What happens if the trustees sell or mortgage the land?
The new owner or lender will want to make sure the beneficiaries do not have rights in the land which could bind them
What will the beneficiaries want to ensure if a trust of land is sold?
The beneficiaries will wish to make sure their interests are protected
What is the effect of overreaching?
It moves the beneficiary’s interest away from the land and into money PROVIDED THAT the money is paid to at least two trustees
Does overreaching apply to registered and unregistered land?
Yes it applies to both
How does overreaching work?
If the buyer/lender pays the purchase/loan money to at least two trustees, overreaching detaches the beneficiary’s equitable interest from the land and transfers it into the monies
What does the beneficiary hold an interest in after overreaching?
The beneficiaries have an interest in the money, not the land
How can a beneficiary protect their interest in a trust of land?
By registering a restriction on the Proprietorship register instructing a purchaser to pay money to at least two trustees
How can a beneficiary be protected?
If their interests are not overreached and they are in actual occupation - they may have overriding interests under LRA Sch 3 para 2
What happens if a beneficial interest in trust is not overreached?
The interest remains in the land, but will not necessarily be binding. It is not automatically binding, as to be binding the holder of the interest needs to be in actual occupation
