As we have noted, the fact that you are the legal title holder of land does not mean you are the only person with an interest in the land. Another common type of interest in land is that of an equitable interest.

One example of an equitable interest in land is the case of a trust. This is a relationship whereby one person (the trustee) holds land for the benefit of another person (the beneficiary). Here, the trustee holds a legal interest and the beneficiary holds an equitable interest. A person can also gain an equitable interest in land when they enter into a contract to purchase land or when they have sold land but have not yet received payment. Under the Torrens system, an interest that is not registered in the system is said to be an unregistered interest or an equitable interest.

The rules surrounding equitable interests are rather complicated and technical. The point, however, is that interests, be they legal or equitable, will often clash. In some circumstances, a person with an equitable interest may have a better claim to land than the legal title holder. It is therefore important to know exactly what interests certain people have in a property before you enter into an agreement.