purchaser for value without notice

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One who acquires land either in return for money or other consideration having monetary value and who does not know and has no reason to know of an encumbrance that adversely affects the land. Such a purchaser is not bound by certain equitable encumbrances, such as restrictive covenants created before 1926 or the rights of beneficiaries under a trust in unregistered land. However, in order to take free of encumbrances, such a purchaser must act in good faith (bona fide), and, in any event, most equitable encumbrances are capable of registration (see registration of encumbrances) and a purchaser is deemed to know of any interest that is registered. Some encumbrances in registered land may be overriding interests and will bind a purchaser whether he knows of them or not. Legal encumbrances (such as legal easements) always bind a purchaser of the land whether or not he knows of their existence.

Subjects: Law.

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