OVERREACHING
Slides from BiteSize Law on Youtube
If an equitable interest is overreached, it is NOT binding on a purchaser.
EXAMPLE:
If a third party contributes in the purchase price of a land, they acquire an equitable beneficial
ownership in that land
Vicky and Vince are selling their house. When they first bought it, Ben and Melinda- Vicky’s parents
contributed 20k into purchasing the land. So they acquire an equitable beneficial ownership in the
property under a constructive trust
So, because they all contributed towards the purchase price, they will all be beneficial owners.
However on the title property, Penny (the buyer) will only know about Vicky and Vince. Their nname
will only be the ones on the deed and register.
There are TWO trustees of that constructive trust.
Vince and Vicky are the legal owners so they are the trustees and they are holding the property
on trust for themselves and Ben and Belinda because they all contributed towards the purchase
price.
Questions to consider when looking at overreaching
1. Is it the type of equitable interests that can be overreached?
2. Have the statutory conditions been met for overreaching?
1. LPA 1925 s2
Equitable interest under a trust: Express trust, Co-ownership, Constructive/Resulting trust
Its only a beneficial interest under a trust that could potentially be overreached.
So if you have que involving a 3rd party with a beneficial interest under a trust, start
thinking of overreaching.
2. LPA ss.2(1) and s.27- A purchaser must: Acquire a legal estate and Pay the purchase price to
at least 2 trustees.
Slides from BiteSize Law on Youtube
If an equitable interest is overreached, it is NOT binding on a purchaser.
EXAMPLE:
If a third party contributes in the purchase price of a land, they acquire an equitable beneficial
ownership in that land
Vicky and Vince are selling their house. When they first bought it, Ben and Melinda- Vicky’s parents
contributed 20k into purchasing the land. So they acquire an equitable beneficial ownership in the
property under a constructive trust
So, because they all contributed towards the purchase price, they will all be beneficial owners.
However on the title property, Penny (the buyer) will only know about Vicky and Vince. Their nname
will only be the ones on the deed and register.
There are TWO trustees of that constructive trust.
Vince and Vicky are the legal owners so they are the trustees and they are holding the property
on trust for themselves and Ben and Belinda because they all contributed towards the purchase
price.
Questions to consider when looking at overreaching
1. Is it the type of equitable interests that can be overreached?
2. Have the statutory conditions been met for overreaching?
1. LPA 1925 s2
Equitable interest under a trust: Express trust, Co-ownership, Constructive/Resulting trust
Its only a beneficial interest under a trust that could potentially be overreached.
So if you have que involving a 3rd party with a beneficial interest under a trust, start
thinking of overreaching.
2. LPA ss.2(1) and s.27- A purchaser must: Acquire a legal estate and Pay the purchase price to
at least 2 trustees.
