⇒ As noted before (see here), proprietary rights/interests (i.e. rights in rem) are rights over land which are capable of affecting third parties.
⇒ Here we discuss the circumstances in which a right in rem over an unregistered freehold estate in land will bind a transferee (i.e. a purchaser or donee) of the freehold estate.
⇒ 1) Legal rights in rem (i.e. legal proprietary rights/interest) bind 3rd parties (transferees/purchasers) automatically.
⇒ 2) Equitable rights in rem will also bind all 3rd parties, except Equity's darling.
⇒ So we distinguish between legal and equitable rights because before 1926 equitable rights would not bind Equity's darling but legal rights always bind the transferee/purchaser of property.
⇒ Once an equitable right has been defeated by Equity's darling it cannot subsequently survive against someone who isn't Equity's darling (Wilkes v Spooner [1911]).
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⇒ Equity's darling often falls on the question of notice (Law of Property Act 1925, section 199(1)(ii)). In other words, whether or not a transferee/purchaser of land is bound by an equitable right in rem will depend on whether or not they had notice of the equitable right in rem. If they did, then they will be bound by the right.
⇒ There are different types of notice:
⇒ The issue was that notice was an uncertain doctrine: the equitable owner could do little to ensure their right survives because often they do not know the land is being sold and it is difficult to assess whether the purchaser ought to have known about the existence of the right through constructive notice. The introduction of the Law of Property Act 1925 partly dealt with this issue...
⇒ 1) Legal rights in rem (i.e. legal proprietary rights/interest) still bind 3rd parties (transferees/purchasers) automatically.
⇒ 2) The effect of an equitable rights in rem changed to reduce the influence of the doctrine of notice (which was too uncertain) through two devices:
⇒ Make sure your are clear on the circumstances where legal and equitable rights in rem bind the transferee of property.
⇒ Some other helpful legal resources on rights in unregistered land:
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