Doctrine of notice

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To have 'notice' of something is to be aware that it exists. In land and property law the concept of notice is usually associated with an Encumbrance on Title. For example, if property X is held on Trust for beneficiary B, then B's interest is an encumbrance, and something a purchaser of X would rather be free of.

The historical position has generally been that a person who 'had notice of' some equitable interest that encumbered the title of something he intended to purchase would be bound by that interest. To show that he had notice, it would be necessary to show that the purchaser actually knew of the interest ('actual notice') or that he would have known of it, had he taken reasonable trouble to find out. For example, where transfers of land were concerned, it was generally assumed that a prospective purchaser had notice if he could have discovered the interest by inspecting the land itself, or by a reasonably thorough Investigation of title. If the purchaser genuinely had no notice of the equitable interest (see: Bona fide purchaser without notice) then he took the property free of the equitable interests. The doctrine of notice seemed to be most troublesome where land transactions were concerned, but it could apply to any kind of property that could be impressed with a trust (money, shares, etc). These days it applies only rarely to land transactions. Where the title to the land is registered, then by statute it is deemed that the purchaser has notice of anything entered on the register, and of nothing else. In Unregistered conveyancing, most equitable interests are required to be entered on the Land Charges Register if they are to be enforceable. The doctrine of notice does continue to apply where unregistered land is held on trust.

Land and Property Law