Bona Fide Purchaser

The distinction the doctrine depends on is drawn by the Law of Property Act 1925. Section 1 confines legal estates and interests in land to a short, fixed list (essentially the fee simple absolute in possession and the term of years absolute, plus specified charges and easements), and provides that all other estates, interests, and charges in or over land take effect as equitable interests. Historically, a purchaser who acquired a legal estate for value and in good faith, without notice — actual, constructive, or imputed — of a pre-existing equitable interest took the land free of it, earning such a purchaser the informal label 'equity's darling'.

For registered land, the Land Registration Act 2002 has replaced most of that inquiry with a statutory priority rule. Under section 29, if a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration. The main exceptions are set out in Schedule 3, headed 'Unregistered interests which override registered dispositions', which include an interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation — meaning that even a registered disposition purchaser is not always protected, and old-style notice-based reasoning can still matter at the margins.