Overriding" interests: persons in actual occupation- FS Flashcards
(12 cards)
What is the definition of an Overriding Interest
An interest in land that binds a purchaser of registered land even though it is not recorded on the register, including certain short-term leases and rights of persons in actual occupation (Schedule 3, Paragraph 2, Land Registration Act 2002).
What is the key statutory source of the doctrine protecting rights of occupiers in land?
Paragraph 2, Schedule 3 of the Land Registration Act 2002, which protects the rights of those in actual occupation at the time of disposition.
What are the legal consequences if a bank enforces a charge but does not obtain a possession order before selling a property?
The sale may be subject to overriding interests of persons in actual occupation, potentially preventing vacant possession and impacting the buyer’s title.
Criteria for Actual Occupation (from case law)
Factors considered to determine actual occupation include:
- Degree of permanence and continuity
- Intentions and wishes of the person
- Length and reason for absence
- Nature of the property
- Personal circumstances of the claimant
What is the definition of Actual Occupation
A question of fact assessed by presence on land, with some degree of permanence and continuity. It is not defined in statute but shaped by case law.
Under what conditions will actual occupation not protect an unregistered interest from being overriding?
If the occupier’s interest is not disclosed on inquiry and the occupation is not obvious on reasonable inspection, the interest may lose overriding status.
Can someone be in actual occupation if they are not physically present at the property?
Yes, if their absence is involuntary (e.g., hospitalization) and there is intention to return, supported by evidence of ongoing connection to the property.
Why might a purchaser be advised not to proceed with buying a mortgaged property where the prior owner is absent but expected to return?
Because the seller (lender) has not obtained a possession order, and the absent owner’s rights may still amount to actual occupation, creating an overriding interest binding the buyer.
What is the effect of overreaching in property law?
Overreaching converts a beneficial interest under a trust into a monetary interest in the proceeds of sale, removing it as a burden on the land.
What are the legal requirements for overreaching to apply?
- There must be a trust in land
- The interest must be equitable
- The sale proceeds (capital money) must be paid to at least two trustees (LPA 1925, s2)
In what situations might actual occupation not protect an equitable interest?
If the person’s presence is not obvious on a reasonable inspection, and they fail to disclose their interest when reasonably asked, the protection under Schedule 3 para 2 will not apply.
Can a lender sell a mortgaged property without first obtaining a possession order?
Yes, but doing so risks the sale being subject to the overriding interest of any occupier still in actual occupation. The safest course is to obtain a possession order first.
