Equitable Interest

An equitable interest is one which would be recognised by the Court of Chancery. It is enforceable in limited circumstances as opposed to a contractual obligation which is strictly enforceable regardless of who is involved. Contract law may be certain but it is not always fair. An equitable interest usually carries with it a significant element of fairness.

An equitable interest will not necessarily be registered by Land Registry and may drop away if a later purchaser of the property was not, and could not reasonably have been, aware of the equitable interest before entering the contract. Accordingly, anyone with an equitable interest in a property should talk to a solicitor about having the matter registered as a covenant to maintain its long-term validity.