Special Statutory Powers
Trustees of land are given power to sell the land and reinvest the proceeds in either land for occupation or use by a beneficiary, or otherwise. The land purchase may be outside the State. The trustees of land are subject to the duties applicable to trustees generally.
The powers conferred on trustees by statute, may be supplemented, amended or restricted. Provision may be made imposing conditions on the exercise of powers.
The major innovation of the 2009 Act is that it allows overreaching of equitable interests in a much broader and systematic way, than had previously applied under the Settled Land Act. Certain conveyances by the trustees to a purchaser of the legal estate or of a legal interest in land, overreaches any equitable interest. The interest ceases to affect the estate or interest whether or not the purchaser had notice of it.
Power of Sale
The 2009 provision permits overreaching of any estate or interest in land, whether or not subject to a settlement or trust, which would have been subject to the Settled Land Act.
A “purchaser” from trustees of land, includes any mortgagee, lessee or assignee. He or it must acquire the land for valuable consideration. This need not be full value, but may not be a voluntary transfer or gift.
The principle of notice has been greatly eroded by the 2009 Act provisions. Overreaching may occur, whether or not the purchaser has actual or constructive notice of an equitable interest. The purchaser or other person acquiring the interest, takes it free from the equitable interests, which attach to the proceeds of sale.
The principle does not apply where the conveyance is for fraudulent purposes, of which the purchaser has actual knowledge. A sale by trustees, who patently do not intend to account to the beneficiaries is likely to fall into this category.
A continuing exception to the principle, is the possibility of the creation of mortgages by deposit in the case of unregistered title land. The purchaser will continue to be bound by notice of the fact that key deeds on the chain of title are missing. However, such mortgages are likely to become less common as lands become compulsory registrable and must accordingly be the subject of a charge, registered in the Land Registry.
Conveyance by Two Trustees and Overreaching
Where the conveyance is of land held by persons in succession, under a trust for sale or settlement or where lands are vested in a minor, a conveyance by two trustees or a trust corporation overreaches equitable interests. This category covers those who would have been subject to the Settled Land Acts.
This is subject to exceptions
- any conveyance made for fraudulent purposes of which the purchaser has actual knowledge at the date of the conveyance or to which the purchaser is a party, or
- rights protected in the conveyance
- mortgages by deposit
- Family Home protection Act rights.
Sale by Single Trustee
In the case of a sale by a legal owner or a single trustee of any other trust of land, the following interests and rights are not overreached;
- rights which are protected by registration prior to the date of the conveyance or
- the rights of persons in actual occupation or the lands or rents of the land, save where, upon enquiry made of such person, the rights are not disclosed
In the case of a conveyance by two or more trustees or by a trust corporation, the above rights may be overreached.