Barclays Bank Plc v Zaroovabli [1997] Ch 321
Whether statutory tenancies can be overriding interests.
Facts:
Barclays Bank claimed possession of a house from Mr and Mrs Zaroovabli (Z), and their tenant, Mrs Pourdanay (P). Z had obtained a mortgage from Barclays in 1988. A month later Z granted P a tenancy of the property. When the contractual tenancy ended P became a statutory tenant under s.(1)(a) Rent Act 1977. However, the bank did not register their charge until 1994. The trial judge gave the bank possession. P appealed.
Issues
P claimed an interest under s.70(1)(k) Land Registration Act 1925 which says that registered land is deemed to be subject to leases under 21 years, and under s.98 Rent Act 1977 which prohibited the court from ordering possession of a dwelling where the tenancy pre-dated the mortgage. The bank argued that P’s tenancy was not an overriding interest as it had to exist at the date of completion. They also argued that P’s lease was not protected by s.70(1)(k) of the 1925 Act as this only applied to leases that were ‘granted’ and not to statutory tenancies.
Decision/Outcome
The court found in favour of P. The determining date for an overriding interest was the date of registration, not completion, following Abbey National v Cann[1991] AC 56. If the lease was still in operation when the bank registered their charge, it would be an overriding interest under s.70(1)(k) of the 1925 Act. It made no difference whether this was a contractual lease or a statutory tenancy as to hold otherwise would have frustrated the purpose of the 1977 Act.
Updated 21 March 2026
This case summary remains accurate as a statement of the law as it stood under the Land Registration Act 1925 and the Rent Act 1977. However, readers should be aware of two significant developments affecting the broader legal framework discussed in the article.
First, the Land Registration Act 1925 has been repealed and replaced by the Land Registration Act 2002. The relevant provision, s.70(1)(k) of the 1925 Act, no longer exists in that form. Overriding interests are now governed by Schedules 1 and 3 of the 2002 Act. Schedule 1 (interests overriding first registration) and Schedule 3 (interests overriding registered dispositions) both include legal leases granted for a term not exceeding seven years (reduced from 21 years under the 1925 Act). The principle established in Barclays Bank v Zaroovabli — that a statutory tenancy can qualify as an overriding interest — has not been legislatively reversed, but students should apply it within the framework of the 2002 Act rather than the 1925 Act.
Second, the Rent Act 1977 statutory tenancy regime continues to apply to tenancies created before 15 January 1989, but the Rent Act regime is now largely historical in scope, having been substantially superseded by the assured tenancy framework under the Housing Act 1988 for tenancies created after that date. The case therefore retains greater significance as legal history and in relation to pre-1989 tenancies than as a guide to modern residential landlord and tenant law.
The case citation and its core holdings are accurately stated. Abbey National Building Society v Cann [1991] AC 56 is correctly cited and remains good law on the relevant date for determining overriding interests.
