- Equitable interest
An equitable interest is an "interest held by virtue of an equitable title (a title that indicates a beneficial interest in property and that gives the holder the right to acquire formal legal title) or claimed on equitable grounds, such as the interest held by a trust beneficiary." [Black's Law Dictionary. Second Pocket Edition. p. 361. 2001 West Group.
Bryan A. Garner (editor in chief)] The equitable interest is a right in equity that, if violated (suffers a harm), is subject to satisfaction by anequitable remedy . This concept only exists in thecommon law .Equity
Equity is a concept of rights distinct from legal rights, i.e., "the body of principles constituting what is fair and right (natural law)."Black's Law Dictionary. Second Pocket Edition. p. 241. 2001 West Group.
Bryan A. Garner (editor in chief)] . It was "the system of law or body of principles originating in the English Court of Chancery and superseding the common and statute law (together called 'law' in the narrower sence) when the two conflict." In equity, a judge determines what is fair and just and makes a decision as opposed to deciding what is legal.An example of an equitable interest may be found in a trust. In a trust, the
trustee has a legal interest in the trust. However, the beneficiaries to the trust has an equitable interest in the trust. The trustee has thepower of attorney , or legal rights over the trust. Meanwhile the beneficiaries, the holder of the equitable interest has an equitable right in the trust. If the trustee fails to perform his or her duties, then the beneficiary may sue the trustee in equity to perform his or her duties. Such a situation includes the trustee failing to disburse cash from the trust's property,corpus , to the beneficiary. Likewise a trustee mayembezzle the trust's property and, although the trustee has a legal interest in the trust, the beneficiary has an equitable interest in the trust and so may sue for the trustee to return the trust's property or reimburse the trust for the value of the property embezzled.Land Law
An equitable interest over land which is not conveyed correctly may still be effective because of the rule in "Walsh v Lonsdale". [(1882) 21 Ch.D. 9.] In this case it was held that 'equity looks on that as done which ought to be done' and a contract, which does not meet the requirements of a deed, [Required by the
Law of Property Act 1925 s.52(1)] may be specifically enforced to convey the equitable interest to the new purchaser. This rule has had a significant impact because it allows interests which have not been conveyed by a deed to still be binding on future purchasers, through the doctrine ofconstructive notice . However, the UK Parliament has weakened the impact of this rule, with the Law of Property (Miscellaneous Provisions) Act 1989 s.2 [ [http://www.opsi.gov.uk/acts/acts1989/ukpga_19890034_en_1#l1g2 Law of Property (Miscellaneous Provisions) Act 1989 s.2] ] which requires all contracts for the sale of land (which could be specifically enforceable) to be in writing and be signed by both parties. Any contracts which are not in writing and signed by both parties cannot be specifically enforced, therefore will not create or transfer an equitable interest in land.ee also
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Equitable servitude
*Overriding interest References
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