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right in favour of his financial one, without the chance to make a choice. We see no reason why equitable owners should be at a disadvantage in this respect.

4.2.We are, however, conscious of the need to maintain arrangements which will not unduly interfere with conveyancing. This leads us to place our emphasis on protecting the rights of owners of equitable interests who are in actual occupation of the property. That very fact of occupation can be used to alert prospective purchasers and mortgagees to the claims of the equitable owners. It means that the protection of occupation rights does not extend to those who, while they are entitled to occupy, are not currently exercising the right. While that means that equitable owners will sometimes be at a disadvantage, when compared with legal owners, it seems to us to be a reasonable compromise. It offers the right to continue in occupation, to those who are already there, so it is likely to extend the new protection to those who most need it, and of course protection extends to those who enter later.

4.3.Our principal recommendation, to protect the occupation rights of those with an equitable interest in property, can be succinctly stated:

A conveyance of a legal estate in property should not have the effect of overreaching the interest of anyone of full age and capacity who is entitled to a beneficial interest in the property and who has a right to occupy it and is in actual occupation of it at the date of the conveyance, unless that person consents.

Notes and Questions 14.3

Read the above extract and City of London Building Society v. Flegg [1988] AC 54 and State Bank of India v. Sood [1997] Ch 276, either in full or as extracted at www.cambridge.org/propertylaw/, and consider the following:

1The statutory provisions about trustees’ duties to consult beneficiaries and act in accordance with their wishes now appear in the Trusts of Land and Appointment of Trustees Act 1996. For an analysis of the effect of these changes on overreaching powers, see Harpum, ‘Overreaching, Trustees’ Powers and the Reform of the 1925 Legislation’; Ferris and Battersby, ‘The Impact of the Trusts of Land and Appointment of Trustees Act 1996 on Purchasers of Registered Land’; Dixon, ‘Overreaching and the Trusts of Land and Appointment of Trustees Act 1996’; Ferris and Battersby, ‘Overreaching and the Trusts of Land and Appointment of Trustees Act 1996 – A Reply to Mr Dixon’; Ferris and Battersby, ‘The General Principles of Overreaching and the Reforms of 1925’.

2Explain why the House of Lords in Flegg refused to accept the interpretation of section 14 of the Law of Property Act 1925 put forward on behalf of the Fleggs. What does section 14 mean?

3Why was ‘Bleak House’ not put in the joint names of the Fleggs and the Maxwell-Browns? Is this a relevant factor in considering whether the Fleggs’ interests should be overreachable without their consent?