Overreaching-FS

Question 1

What is the legal effect of overreaching in property law?

Answer 1

Overreaching converts a beneficiary’s equitable interest in land into a right to the proceeds of sale, thereby removing the interest from the land and allowing sale to proceed unimpeded.

Question 2

Definition: Overreaching

Answer 2

A legal mechanism under which equitable interests in land (typically arising under a trust) are transferred from the land itself to the proceeds of sale, ensuring a purchaser takes the land free of those interests.

Question 3

What are the three key requirements for overreaching under Section 2 of the Law of Property Act 1925?

Answer 3

1. The land must be held under a trust.
2. The interest being overreached must be equitable.
3. Capital money from the sale must be paid to at least two trustees or a trust corporation.

Question 4

Why must capital money be paid to at least two trustees for overreaching to be valid?

Answer 4

To prevent abuse of power by a single trustee and to ensure a safeguard for the beneficiaries’ interests.

Question 5

Can overreaching apply to all third-party interests in registered land?

Answer 5

No. Overreaching only applies to equitable interests under a trust. It does not apply to statutory rights such as matrimonial home rights.

Question 6

Is consent from beneficiaries or the court required for overreaching to occur?

Answer 6

No. Overreaching does not require consent from the beneficiaries or the courts; it occurs automatically if statutory conditions are met.

Question 7

What is the practical benefit of overreaching for a purchaser of land?

Answer 7

It allows the purchaser to acquire the property free from equitable interests, thereby securing clear and marketable title.

Question 8

In the context of overreaching, what is the significance of a trust of land?

Answer 8

A trust of land is essential; without it, there is no equitable interest to be overreached, and the doctrine does not apply.