Here Rose contributed half of the purchase price when Major Thorn acquired Bramble Farm. Equitable rights will be overreached if the proper formalities of the purchase are observed under ss2 and 27 LPA 1925. Consequently, this right will not affect his enjoyment of the land. However, it is the Court’s discretion to decide whether Rose has an overreaching interest or not. If Court held that Rose has overreaching interest then Mr. Hay has to pay Rose half of the purchase price though she was not registered owner of the Bramble Farm.Rose had no actual occupation, so she can’t claim overriding interest under s. 70 (1) (g) of LRA 1925. But from the question, it is not possible to identify whether Rose had actual occupation or not. Therefore, Rose may have an overreaching interest under this section. The principle of overreaching is that rights arising under equity that attaches to the land can be transferred from the land to the capital money. Under s 27(2) of Law of Property Act 1925, overreaching will apply where there is two or more trustee or a trust corporation and the purchase money is paid over to both of them. In the City of London Building Society v Flegg1 a son, his wife, and his parents joined together to purchase the property. The son and daughter-in-law were registered as owners. They owned the legal estate as trustees for themselves and their parents-in-law. The parents-in-law were in occupation of the property but when the loan was not repaid the building society decided to exercise its power of sale it was held that their rights were overreached2. The rights of the parents-in-law should have been protected because their rights were transferred to the capital money.2) Section 1(1)(b) of the LPA1925 provides the definition lease and it must be created in the proper manner and it must satisfy the definition contained in LPA 1925 s. 205(1)(xxvii). Here, Mr. Wood has produced a properly executed deed.
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