## Introduction

Constructive notice is the idea that the law treats someone as knowing a fact they could and should have discovered with proper enquiry. In property transactions, that usually means carrying out sensible checks: inspecting the property, asking the right questions, and searching the relevant registers. If you fail to do so, the law may treat you as if you knew about interests that a careful buyer or lender would have found.

This guide explains how constructive notice operates in unregistered and registered land, how it differs from actual notice, and where it reaches beyond land law (for example, undue influence and receipt of trust property). You will find clear case summaries and practical steps you can use in everyday conveyancing and lending work.

## What You’ll Learn

- What constructive notice means and how “reasonable enquiry” works
- The doctrine of notice in unregistered land and the role of the Land Charges Register
- How registered land deals with priorities and overriding interests under the LRA 2002
- The difference between actual, constructive and imputed notice
- How constructive notice features in undue influence cases (O’Brien, Etridge)
- How banks and recipients of funds can be fixed with knowledge in breach of trust cases
- Practical checks to reduce risk for buyers, lenders and advisers

## Core Concepts

### What is constructive notice?

- Meaning: You are taken to know what you would have discovered through proper enquiries and inspection. It is not about your actual state of mind but about what a reasonable purchaser or lender in your position should have found out.
- Reasonable enquiry: This typically includes:
  - Physical inspection of the property
  - Enquiries of the seller and anyone in occupation
  - Appropriate searches (Land Registry for registered land; Land Charges Register and deeds for unregistered land)
  - Reviewing title documents and replies to enquiries
- Imputed notice: Knowledge held by your agent (for example, a solicitor or valuer) is usually treated as your knowledge. If your appointed agent spots a red flag, you are treated as knowing about it.

### Unregistered land: doctrine of notice and Land Charges Register

- The doctrine of notice governs priority for many equitable interests in unregistered land. A purchaser of a legal estate who gives value and has no notice (actual, constructive or imputed) of an equitable interest takes free of it. This person is often called “equity’s darling”.
- However, since 1926, many equitable interests in unregistered land must be protected by registration as land charges under the Land Charges Act 1972. Key points:
  - If a registrable land charge is properly registered, it binds a purchaser whether or not they knew about it.
  - If it should have been registered but was not, it may be void against a purchaser for money or money’s worth, even if the purchaser had actual notice.
- For equitable interests that are not registrable as land charges (or pre-1926 rights), the traditional doctrine of notice still matters. Failing to inspect or enquire can amount to constructive notice.

### Registered land: the LRA 2002 and overriding interests

- In registered land, priority is mainly determined by the register. Interests should be protected by entries (notices, restrictions) on the title.
- Some interests bind a buyer even if not entered on the register. These are “overriding interests” in Schedule 3 of the Land Registration Act 2002 (for example, certain rights of people in actual occupation).
- Although “notice” is generally irrelevant to registered land priority, sensible inspection and enquires are still essential:
  - To discover whether anyone is in actual occupation with rights that override the register
  - To avoid missing defects or red flags that may affect enforcement or lender security
- Overreaching: On a sale by two trustees, beneficial interests under a trust are usually overreached (converted into a right to the sale proceeds), so the buyer takes free of those equitable interests even if the beneficiaries are in occupation.

### Actual, constructive and imputed notice compared

- Actual notice: You actually know the relevant fact (for example, you have been told about a restrictive covenant).
- Constructive notice: You are treated as knowing what proper enquiries and inspection would have revealed.
- Imputed notice: Knowledge of your agent (conveyancer, valuer) is treated as your knowledge if obtained in the scope of their authority.

Tip: Keep a clear audit trail of inspection notes, searches, and enquiries. Good records help defend against claims that you should have known about a hidden interest.

## Key Examples or Case Studies

### Hunt v Luck [1902] 1 Ch 428

- Context: Purchaser found a tenant in occupation.
- Key point: Where there is someone in occupation, a purchaser is on enquiry and is treated as having constructive notice of the occupier’s rights and of the interest of anyone to whom the occupier pays rent.
- Application: Always find out who is in occupation and the basis of their occupation.

### Re Nisbet and Potts’ Contract [1906] 1 Ch 386

- Context: Restrictive covenants affecting unregistered land were discoverable from title documents.
- Key point: A purchaser can be fixed with constructive notice of equitable rights shown on the title if they fail to investigate properly.
- Application: In unregistered land, review the root and chain of title thoroughly and ask targeted enquiries about historic covenants.

### Kingsnorth Finance Co Ltd v Tizard [1986] 1 WLR 783

- Context: Lender’s valuer inspected at a time fixed by the borrower; signs showed occupation by the borrower’s estranged wife.
- Key point: The lender, through its agent, had constructive (and imputed) notice of the wife’s equitable interest. An agent’s knowledge is treated as the principal’s knowledge.
- Application: Arrange truly independent inspections and follow up on any clues of third-party occupation.

### Williams & Glyn’s Bank Ltd v Boland [1981] AC 487

- Context: Wife contributed to purchase price but was not on the title; she was in actual occupation of registered land.
- Key point: Her equitable interest was an overriding interest binding the lender. Actual occupation can protect a beneficial interest despite the register.
- Application: In registered land, ask about non-owner occupiers and inspect. Consider overreaching where possible.

### Barclays Bank plc v O’Brien [1994] 1 AC 180 and RBS v Etridge (No 2) [2001] UKHL 44

- Context: Spousal guarantees and undue influence.
- Key point: Where a transaction is not obviously for the surety’s advantage and there is a real risk of undue influence, a bank is “on enquiry” and must take reasonable steps (per Etridge) to ensure the surety receives independent legal advice in a proper private meeting with disclosure of relevant financial information.
- Application: Lenders should follow the Etridge protocol. Failure risks the security being set aside.

### Crédit Agricole Corp & Investment Bank v Papadimitriou [2015] UKPC 13 and Byers v Saudi National Bank [2022] UKPC 48

- Context: Knowing receipt of misapplied trust property.
- Key point: A recipient can be fixed with knowledge if facts would give a reasonable banker serious cause to question a transaction and they fail to make enquiries. Byers confirms the claimant must have a continuing proprietary interest; if the recipient takes free of the trust, knowing receipt fails.
- Application: Financial institutions must scrutinise the source and structure of payments and escalate suspicious features.

## Practical Applications

For buyers and their conveyancers

- Inspect the property personally or through a competent agent. Look for signs of occupation by anyone other than the seller.
- Ask the seller and any occupiers targeted questions about their rights, contributions to price, and length of occupation.
- Search the correct registers:
  - Registered land: Official copies, title plan, and any notices or restrictions
  - Unregistered land: Land Charges Register searches and thorough review of the deeds
- Check for overreaching on sales by trustees. Ensure purchase monies are paid to at least two trustees or a trust corporation.
- Raise requisitions on title that probe historic covenants, easements, options and pre-emption rights.
- Keep a written record of all inspections, searches, replies to enquiries and follow-up questions.

For lenders and valuers

- Arrange independent inspections that are not controlled by the borrower. Note any signs of occupation (post, clothing, children’s items, separate rooms).
- Ask the borrower to complete declarations about occupiers and obtain occupiers’ consent or postponement of rights where appropriate.
- Apply the Etridge steps for any third-party security or guarantees:
  - Independent legal advice for the surety
  - Private meeting without the influencer present
  - Clear explanation of risk and extent of liability
- Treat unusual payment routes, offshore structures, or compressed timelines as red flags. Seek further information before completion.

For recipients of funds and banks (knowing receipt risk)

- Assess whether the transaction structure makes commercial sense and whether the payer has authority to deal with the assets.
- Investigate red flags: last-minute changes of payee, circular payments, inconsistent documentation, or involvement of entities with no clear role.
- Document your enquiries and decisions. If doubts remain, pause and escalate.

Common pitfalls to avoid

- Assuming the register tells the whole story in registered land. It may not reveal occupiers’ rights.
- Failing to conduct Land Charges searches for unregistered land.
- Relying on a seller-arranged inspection without independent checks.
- Ignoring signs of third-party occupation or dismissing them without follow-up.

## Summary Checklist

- Know the difference between actual, constructive and imputed notice
- In unregistered land:
  - Search the Land Charges Register for registrable charges
  - Apply the doctrine of notice for non-registrable equitable interests
- In registered land:
  - Check the register and inspect for possible overriding interests
  - Consider overreaching on trustee sales
- Ask occupiers about their rights and contributions; record replies
- For lenders: follow the Etridge protocol on surety transactions
- For banks/recipients: make enquiries where circumstances would cause a reasonable person to question the transaction
- Keep a complete paper trail of inspections, searches, enquiries and advice

## Quick Reference

| Concept                           | Authority                        | Key takeaway                                              |
| --------------------------------- | -------------------------------- | --------------------------------------------------------- |
| Doctrine of notice (unregistered) | Case law (e.g., Hunt v Luck)     | Equity’s darling takes free if without notice of equities |
| Land Charges Register             | Land Charges Act 1972            | Registrable charges bind if registered; void if not       |
| Overriding interests              | LRA 2002, Sch 3 (e.g., Boland)   | Actual occupation can bind despite the register           |
| Imputed notice                    | Agency principles (e.g., Tizard) | Agent’s knowledge within scope is treated as yours        |
| Undue influence safeguards        | O’Brien; Etridge                 | Banks are on enquiry; independent legal advice required   |

Constructive Notice in Property Law