Define: Overreaching

The legal process by which the interest in an asset is converted into a corresponding interest in another asset.

For example, interest in a real property converted into an interest in the amount realised from its sale.

If an Estate in land is subject to a Trust, the purchaser of the estate will be bound to give effect to the beneficiaries’ interests if he has, or should have, notice of then (see: Doctrine of notice).

This will generally be very unfortunate for a purchaser.

Under s.2 of the Law Of Property Act (1925), the purchaser escapes the beneficiaries’ claims if he pays the money to two trustees or a trust corporation. This is ‘overreaching’; the beneficiaries interests are said to be ‘overreached. It has been suggested that overreaching gives too much power to the purchaser, at the expense of the beneficiaries but, despite the efforts of the Law Commission, it remains in effect.

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This glossary post was last updated: 29th March, 2024.