Equitable interest
What is a legal interest? 

An “interest” in respect to land is defined in the Acts Interpretation Act 1954 (Qld) as a “legal or equitable estate in the land” or “a right, power or privilege over, or in relation to, the land”. There is a clear distinction between a ‘legal’ and ‘equitable’ interest in land.  

A legal interest in land is a legally enforceable right to possess or use the real property. If you have a legal interest over land, it makes you the legal owner. As the legal owner, you will have the right of control over the land including the right to transfer ownership of it. In Queensland, to be a legal owner of real property you must be registered as such on the title of the property in the land titles registry. 

What is an Equitable Interest? 

An equitable interest arises in circumstances where someone may have a legitimate interest in a property, without being the legal owner of it. As it is not “true ownership”, it can be overridden by legal ownership and the only way that it can be enforced is by a Court with requisite jurisdiction. 

An equitable interest in property usually needs to be in writing to be enforceable. In Queensland, Section 11 of the Property Law Act 1974 (Qld) requires that an interest in land must be in writing and must be signed by the grantor.  

  1. Examples of an equitable interest in land may include: 
  2. Equitable rights over land; 
  3. A beneficiary’s interest in a trust for example, constructive trust and / or implied or resulting trust;  
  4. Proprietary interests that are counterparts to common law interests; 
  5. A partner’s interest in the partnership; 
  6. Equitable security interests. 
  7. What comes into consideration? 

While having equitable rights in land do not have the same rights as having legal title, the Court may recognise an equitable interest because it is ‘just and fair to do so’. Whether an equitable interest in land exists will be considered by the Court on a case by case basis.   

How do I secure an equitable interest in land? 

In Queensland, if you consider that you have an equitable interest in land and you wish to protect that interest, depending on the circumstances you may be able to lodge a caveat over title of the land in the land title registry to secure your interest. 

However, there is a strict process which you must correctly follow in order to lodge a caveat over land in Queensland and the consequences of getting it wrong can be dire.  

For example, there are strict timeframes in which certain steps must be taken by the person lodging the caveat. Failure to comply with the process within those timeframes may result in the caveat lapsing and the person losing the security which the caveat may have otherwise offered.   

Further, if you lodge or continue with a caveat without reasonable cause, you must compensate anyone else who suffered loss or damage as a result of this: section 130 of the Land Title Act 1994 (Qld).  

If you are considering lodging a caveat over land, you should seek advice from a solicitor before doing so.  

Next Steps 

If you think you may have an equitable interest in land and are considering pursuing or protecting your interest – get in touch with one of our litigation and property dispute lawyers today. Klein Legal are litigation and dispute experts and can assist you by giving you the right advice.    

This is general information only and does not constitute legal advice.   

If you or someone you know would like more information or require advice about anything raised in this article, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au.