Overriding Interests

Land Law > Overriding Interests

Overriding interests are the major exception to the mirror principle of registered land. They bind a purchaser despite not appearing on the register. Candidates frequently lose marks by misapplying the "actual occupation" requirement or by forgetting that certain interests (easements, short leases) can override without occupation. This is a high-yield, frequently tested area of SQE1.

What Is Overriding Interests in SQE1?

Overriding interests are interests in land that bind a purchaser of registered land despite not being entered on the register (Schedule 3 of the Land Registration Act 2002). They are overriding because they override the register without needing to be registered. This creates an important exception to the mirror principle: the register does not always show the full picture of who has rights over the land.

Schedule 3 distinguishes between interests that override on first registration (Schedule 2) and interests that override subsequent dispositions (Schedule 3). In most SQE1 scenarios, you will be dealing with Schedule 3 (subsequent sales/mortgages). The main categories are actual occupation, easements, leases of seven years or less, and certain other rights. Understanding which interests are overriding is critical to analysing priority of interests in the registered land system.

Key Principles for SQE1

Schedule 3 – Interests Overriding Subsequent Dispositions: Schedule 3 lists interests that bind a transferee or mortgagee for valuable consideration. The principal categories are: (1) interests of persons in actual occupation; (2) easements and certain covenants (if not expressly excluded from the register); (3) leases for a term not exceeding seven years; and (4) certain other statutory and common law rights.
Actual Occupation – Core Requirement: An interest is overriding if the person benefiting from it is in actual occupation of the land (or part of it) at the time of the disposition. Actual occupation is physical presence with the intention of remaining. It is not satisfied by merely owning property or by abstract interest in the land. The person in occupation must have a legal or equitable interest (not merely a contractual right), and they must be in actual occupation at the moment of transfer or taking of a mortgage.
Exceptions to Actual Occupation Override: The LRA 2002 provides important exceptions. If the buyer has made reasonable enquiries and the occupier has failed to disclose their interest, the override may be lost. Additionally, if the occupier was in occupation but failed to disclose their rights when asked, they may not override. This is a recent development (post-2002) and is frequently tested.
Easements and Restrictive Covenants: Easements override if they were acquired by prescription or implied grant (s.62 LPA 1925) and are not expressly excluded from the register. Restrictive covenants do not override as a general rule, unless created before 1926 or in exceptional circumstances. This is an important boundary: easements are more likely to override than covenants.
Short Leases – Leases ≤ 7 Years: Leases for a term not exceeding seven years override the registered title and do not need to be registered. They bind a purchaser even though they do not appear on the register. This is a major departure from the general rule that a lease is a legal interest that must be registered for legal effect.
Overriding vs Registered Interests: A registered interest (on the charges register) binds a purchaser automatically. An overriding interest also binds without needing to be registered. An interest that is neither registered nor overriding is defeated by a purchaser. In SQE1 questions, you must classify the interest into one of these three categories.

Exam tip

When you encounter an interest in an SQE1 question, always ask: is it registered? If not, is it overriding? For actual occupation, ensure the person is physically in occupation with intent, not merely interested in the property. For easements, check whether they can arise by prescription or implied grant. For leases, confirm the length of the term. Do not assume an interest overrides; apply the Schedule 3 test systematically. The "disclosure" exceptions are important: if the occupier failed to disclose when asked, the override may be lost.

How This Appears in SQE1 Questions

A scenario presents a sale of a registered property. The seller's mother has been living in the cottage for 10 years (a detached building on the property) under an oral agreement that the mother owns it. The property is sold to a buyer who was not told about the mother. The mother claims she has an overriding interest due to actual occupation. The analysis requires you to identify: (1) the mother has an equitable interest (oral agreement); (2) she is in actual occupation; (3) the buyer was not told. The outcome depends on whether the buyer made reasonable enquiries and the mother failed to disclose. If yes, the override is lost. If the buyer did not enquire, the mother's interest overrides and binds the buyer.

This is a classic SQE1 trap.

Common Mistakes Students Make

Treating occupation as sufficient without a legal/equitable interest – A person in occupation does not override unless they also have a legal or equitable interest in the land. Physical presence alone is not enough.
Misunderstanding the disclosure exceptions – Students often ignore the important exceptions: if the buyer made reasonable enquiries and the occupier failed to disclose, the override is lost. This is frequently tested.
Confusing easements and restrictive covenants – Easements can override; restrictive covenants generally cannot (unless pre-1926). This distinction is critical.
Forgetting short leases override without registration – Leases of seven years or less override. They do not need to be registered for legal effect. Many students mistakenly assume all leases must be registered.

Quick Summary

Overriding interests bind a purchaser despite not being registered – they are exceptions to the mirror principle.
Actual occupation is the main ground of override – the person must be physically in occupation with a legal or equitable interest.
Disclosure exceptions apply – if the buyer made reasonable enquiries and the occupier failed to disclose, the override is lost.
Easements and short leases override automatically – without needing registration.
Restrictive covenants generally do not override – with limited exceptions.

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Overriding Interests for SQE1