Legal Question in Real Estate Law in Australia

Re: equitable interest

This answer refers to interests in real property (land). An equitable interest is based on a right that exists through the operation of equitable doctrines. Such a right may arise through a trust or through the existence of an unregistered dealing relating to the property. A mortgage is a good example; an unregistered mortgage gives rise to an equity, a registered mortgage is a legal interest. Legal because it is registered on the title of the property.

Equitable rights are enforced through actions in the courts. A caveat may be lodged to protect an equitable interest - but usually a court action is required to maintain the caveat.

The major difference between the two types of interest lies in the way they can be enforced and in the fact that legal title is notice to the world of the existence of the right (by registration) and an equitable interest can exist without anyone having notice of it.