Unregistered land - Continuing role of the doctrine of notice

Learning Outcomes

After studying this article, you will be able to explain how the doctrine of notice determines whether equitable interests in unregistered land are binding on a purchaser. You will be able to distinguish between actual, constructive, and imputed notice, and apply these concepts to typical SQE1 scenarios. You will also understand the difference between legal and equitable interests in unregistered land and the practical steps required to protect or avoid being bound by equitable rights.

SQE1 Syllabus

For SQE1, you are required to understand the enforceability of third-party rights in unregistered land, especially the continuing role of the doctrine of notice. Focus your revision on:

• the distinction between legal and equitable interests in unregistered land
• the definition and operation of the doctrine of notice (actual, constructive, and imputed notice)
• the requirements for a purchaser to be bound by an equitable interest
• the concept of the bona fide purchaser for value without notice
• the practical implications for buyers, sellers, and their agents in unregistered conveyancing.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following types of notice can bind a purchaser of unregistered land to an equitable interest?
   1. actual notice
   2. constructive notice
   3. imputed notice
   4. all of the above

2. True or false? A purchaser of a legal estate in unregistered land who pays full value and has no notice of an equitable interest will not be bound by that interest.

3. What is the effect of a solicitor's knowledge of an equitable interest on their client in an unregistered land transaction?

4. Which of the following is NOT a legal interest that binds a purchaser of unregistered land regardless of notice?
   1. legal easement by deed
   2. legal mortgage
   3. restrictive covenant
   4. freehold estate

Introduction

In unregistered land, the enforceability of equitable interests against a purchaser is governed by the doctrine of notice. This doctrine is a core principle of English land law and remains highly examinable for SQE1. It determines whether a purchaser of a legal estate will be bound by pre-existing equitable rights, depending on whether they had notice of those rights. Understanding the doctrine of notice is essential for advising clients and answering SQE1 questions on unregistered conveyancing.

Legal and Equitable Interests in Unregistered Land

Unregistered land is land where ownership and interests are proved by title deeds, not by an entry on a central register. It is important to distinguish between legal and equitable interests, as this affects whether a purchaser is bound by them.

Key Term: legal interest
A right in land recognised by statute as legal (such as a freehold, leasehold, legal mortgage, or legal easement by deed) that binds all the world, including purchasers, regardless of notice.

Key Term: equitable interest
A right in land that is not legal, often arising from trusts, failed formalities, or equitable easements and covenants, which may only bind a purchaser if certain conditions are met.

Legal interests bind everyone automatically. Equitable interests, however, are only binding on a purchaser of a legal estate if the doctrine of notice applies.

The Doctrine of Notice

The doctrine of notice determines whether a purchaser of a legal estate for value in unregistered land is bound by an existing equitable interest. The classic rule is that a bona fide purchaser for value of a legal estate without notice of the equitable interest takes free of it.

Key Term: bona fide purchaser for value without notice
A person who acquires a legal estate in land in good faith, pays valuable consideration, and has no notice (actual, constructive, or imputed) of any prior equitable interest.

If a purchaser does not meet all these criteria, they may be bound by the equitable interest.

Types of Notice

There are three forms of notice relevant to the doctrine:

Key Term: actual notice
Direct, personal knowledge of the equitable interest by the purchaser at the time of purchase.

Key Term: constructive notice
Notice that the purchaser would have discovered if they had made all reasonable enquiries and inspections that a prudent buyer would make.

Key Term: imputed notice
Notice acquired by the purchaser’s agent (such as a solicitor or surveyor) during the transaction, which is attributed to the purchaser.

A purchaser with any of these forms of notice will be bound by the equitable interest.

Worked Example 1.1

Scenario:
Sarah is buying an unregistered house. When she visits, she sees evidence that someone other than the seller is living there. Her solicitor does not ask about this. After completion, the occupant claims a beneficial interest under a trust.

Answer:
Sarah will likely be bound by the equitable interest. The visible occupation should have prompted further enquiry. Failure to investigate means Sarah is deemed to have constructive notice of the interest.

The Practical Effect of Notice

If a purchaser has actual, constructive, or imputed notice of an equitable interest, they will be bound by it. If they have no notice, and have paid value for a legal estate in good faith, they take free of the interest.

Actual Notice

This is straightforward: if the purchaser is told about the equitable interest, or otherwise knows of it, they have actual notice and will be bound.

Constructive Notice

A purchaser is expected to:

• inspect the property in person
• examine the title deeds thoroughly
• make reasonable enquiries of any occupants or parties with apparent rights

If these steps would have revealed the equitable interest, the purchaser is fixed with constructive notice, even if they did not actually know of it.

Imputed Notice

If the purchaser’s solicitor or other agent knows of the equitable interest, that knowledge is imputed to the purchaser. The purchaser cannot avoid being bound by claiming ignorance if their agent was aware.

Worked Example 1.2

Scenario:
A solicitor acting for a buyer of unregistered land discovers a letter in the title deeds referring to a right of way in favour of a neighbour. The solicitor does not inform the buyer, who completes the purchase.

Answer:
The buyer will be bound by the equitable right of way. The solicitor’s knowledge is imputed to the buyer, so the buyer is treated as having notice.

The Role of the Doctrine in Modern Practice

The doctrine of notice is now limited mainly to unregistered land. In registered land, the system of registration and overriding interests has replaced it. However, for unregistered land, the doctrine remains central to the enforceability of equitable interests.

Exam Warning

In SQE1, do not confuse the doctrine of notice (for unregistered land) with the rules for registered land, where registration and overriding interests determine priority.

Revision Tip

Always check whether the interest is legal or equitable, and whether the land is registered or unregistered, before applying the doctrine of notice.

Consequences for Purchasers and Agents

Purchasers of unregistered land must take care to make all reasonable enquiries and inspections. Failure to do so may result in being bound by undisclosed equitable interests. Solicitors and agents must also be diligent, as their knowledge is attributed to the client.

Worked Example 1.3

Scenario:
Tom buys unregistered land. He does not inspect the property, and his solicitor fails to ask the seller about a long-standing occupier. The occupier later claims an equitable easement.

Answer:
Tom will be bound by the equitable easement. Both Tom and his solicitor failed to make reasonable enquiries, so Tom is fixed with constructive and imputed notice.

Summary Table: Legal vs Equitable Interests in Unregistered Land

Key Point Checklist

This article has covered the following key knowledge points:

• In unregistered land, legal interests bind all purchasers automatically, regardless of notice.
• Equitable interests are only binding on a purchaser of a legal estate if the purchaser is not a bona fide purchaser for value without notice.
• Notice can be actual, constructive, or imputed, and includes knowledge held by the purchaser’s agent.
• Purchasers must make reasonable enquiries and inspections to avoid being fixed with constructive notice.
• The doctrine of notice does not apply to registered land.
• The doctrine of notice is central to the enforceability of equitable interests in unregistered land for SQE1.

Key Terms and Concepts

• legal interest
• equitable interest
• bona fide purchaser for value without notice
• actual notice
• constructive notice
• imputed notice