Sale of Land
For the land to be bona vacantia, it must be established that the land was beneficially owned (i.e. not held on trust) by the company at the time it was dissolved.
In the case of land with a registered title, this can be proved by producing office copy entries of the title (obtainable from the relevant District Land Registry), showing the company as the registered proprietor. In the case of land with an unregistered title, it is necessary to trace all of the original title deed, culminating with the conveyance to the dissolved company (for freeholds) or the original lease, and all subsequent deeds of assignment and other assurances, culminating in an assignment to the dissolved company (for leaseholds).
Usually the purchaser will be required to make the necessary enquiries to locate the Land Certificate or the title deeds. The Land Registry can usually assist by advising when, and to whom, the Land Certificate was last issued. If the Land Certificate cannot be traced, the purchaser must make any necessary statutory declaration as to the enquiries which were made, and deal with any enquiries or requisitions raised by the Land Registry. In the case of unregistered land the Treasury Solicitor will only agree to consider a sale if sufficient evidence is deduced to establish to his satisfaction that the land was owned by the company at the date of dissolution. This will normally mean production of the original title deeds.
Depending upon the date when the company was dissolved, it is possible that it can be restored to the Companies Register, and then the land would automatically re-vest in the Company. If restoration is possible, before making any decision as to disposal, enquiries may need to be made of the former shareholders and other interested parties as to whether or not there is any intention of restoring the company.
If the land is subject to a mortgage, that will have to be discharged in the usual way on completion of the sale. However, in those circumstances, the Treasury Solicitor will usually not object to the mortgagee selling the land under the statutory power of sale, and accounting to the Treasury Solicitor for the balance (if any) of the proceeds of sale, after deducting the amount outstanding under the mortgage, provided that (1) the power of sale has legally arisen (i.e. that the legal date for redemption has passed), (2) that the power of sale has become legally exercisable, and (3) the sale is for the full open market value of the land. Before consenting to a sale by a mortgagee, the Treasury Solicitor would require:
- A copy of the mortgage deed, and (if the title is registered) office copy entries of the Charge Certificate.
- A Statement as to the amount currently outstanding under the mortgage, including accrued interest and costs.
- If the property has been marketed, a copy of the Agents' Particulars of Sale, and details of any offers that have been received.
- Written independent advice, preferably from a Chartered Surveyor, as to the open market value of the land in question. Usually the Treasury Solicitor will also need to instruct the District Valuer to advise on this.
- An undertaking from the mortgagee not to sell the land to their agents or employees, nor anyone associated with them, or their agents.
- An undertaking from the mortgagee's solicitors to account to the Treasury Solicitor for the balance (if any) of the proceeds of sale immediately after completion, and to provide a copy of the completion statement, and a certified copy of the Transfer.
If the land is subject to a mortgage, enquiries will therefore have to be made of any mortgagee to ascertain whether they have any intention of realising their security by exercising their power of sale, on the above terms and conditions.
If the amount secured on the property exceeds its open market value, the Treasury Solicitor would normally disclaim the property, and then leave it to the mortgagee to pursue the sale without any further involvement by the Treasury Solicitor.
When dealing with any assets which have passed to the Crown, the Treasury Solicitor act fairly and impartially, but in such a manner as not to prejudice the interests of the Crown. They aim to be fair in all our dealings, and not take an unfair advantage, nor to favour one party over another. They are, however, required to ensure that they obtain the full open market value for any assets that they sell. Therefore, in the case of land or buildings vesting in the Crown as bona vacantia, before any disposal of the property is considered, the advice of the District Valuer will usually have to be obtained on both the price, and the most appropriate method of sale. If the property is tenanted the usual practice of the Treasury Solicitor is first to offer the freehold (or head leasehold) reversion to the tenants. It is also possible that the District Valuer's advice will be that the property should be sold by auction or tender, or offered on the open market, or that adjoining owners in the vicinity or the local authority should be approached to find out whether they have any interest in acquiring the land. There is, therefore, at this stage no certainty that any offer will be made to sell the property to you. To expedite matters, you may approach any tenants, adjoining owners, or the local authority, to ask if they would consent to a sale of the property to you by writing to the Treasury Solicitor and confirming the same. If the land forms part of a road or footpath you should also ask the local highway authority if it has been adopted as a public highway.
If the District Valuer does not recommend a sale on the open market, and none of the adjoining owners is interested in the land, and (where called for) the local authority and/or parish council give the required confirmation, the usual practice is to offer the land (subject to contract) for the sum as recommended by the District Valuer. If the District Valuer advises that the land has no development value, and recommends a sale for a sum representing the current use value of the land, the offer may then be upon the basis that a covenant is imposed restricting the future use of the land, and prohibiting any future development on the land.
The offer to sell the land would be subject to a minimum price of £500, and on the basis that the matter shall remain strictly subject to contract until completion.
It is possible that the title of the company to the land in question may have been extinguished by adverse possession if anyone is in occupation of the land, or has undertaken responsibility for its maintenance. Enquiries will therefore have to be made of anyone who may have a claim to possession of the land.
In order for this matter to proceed please provide the following:
- A plan of A4 size delineating by red edging the extent of the land, and by blue edging any neighbouring land or property that you own.
- The Land Certificate or any unregistered Title Deeds relating to the land which you are holding (and detail any searches or enquiries that you have made at the Land Registry). If you are not holding these, do you know of their whereabouts?
- Office copy entries in respect of your title to any adjoining land or property that you own.
- Full names and addresses of any persons now in occupation of the land, or who have assumed responsibility for its maintenance, and when this commenced.
- Please specify the number and type of buildings on the land in question, and if possible give an indication of the current market value.
- If the land is used in common please provide the names and addresses of the persons who use the land.
If the title to the property is leasehold:
- A copy of the lease or counterpart, and (if the title to the lease is registered) up to date Office Copy Entries of the Register. If the title is unregistered, and if the dissolved company was not the original lessee, please provide copies of all relevant Licences of Assign, Assignments, and Notices of Assignment, necessary to establish that the lease was vested in the dissolved company at the time of its dissolution.
- If the title to the freehold interest is registered please forward up to date Office Copy Entries in respect of that title, or if the title is unregistered, a copy of the conveyance of the freehold interest to the landlord.
- Please confirm the full name, company number (if appropriate), and the current address or registered office of the landlord.
- Please state the amount of the current rent payable under the Lease, and (if appropriate) the date of the last rent review. Are there any arrears to date in respect of rent or service charge or other outgoings? If so, please provide full details. If the rent is paid up to date, who is paying the rent? To whom are these rents being paid at present?
- Apart from rent and outgoings, are there any other breaches of covenant alleged by the landlord? If so, please provide full details.
- Has the property been kept in repair? If not, could you please supply a copy of any outstanding Schedule of Dilapidation which has been served by the landlord, or which the landlord is considering serving.
- Please supply a copy of any sub-leases, licenses, mortgages, or any other matters of title effecting the property of which you are aware.
- Please supply copies of any outstanding Notices served by the landlord under Section 146 of the Law of Property Act 1925, or any other formal notices which have been served.
- Please supply the full name and address (if known) of any persons who are known to be in actual occupation of the property at the present time.
In view of the circumstances whereby title became vested in the Crown, the Treasury Solicitor will be unable to transfer the property with either full or limited title guarantee.
The Treasury Solicitor has a statutory power under Section 656 of the Companies Act 1985 to disclaim the Crown's title to property which vests as bona vacantia. However, he only has a period of 12 months from the date on which the vesting of the property came to his notice in which to make an effective disclaimer. This period may in certain circumstances be reduced to 3 months: see Section 656 (3)(b). Accordingly, if an offer is made to sell the property, completion of the sale must take place within the disclaimer period. Furthermore, if there is any delay during this period the Treasury Solicitor may decide to disclaim the Crown's title without Notice. The Treasury Solicitor will as a matter of policy disclaim commercial leases at a rack rent, and any land used in common, such as private roads, service yards, amenity land, or the common parts of an estate or flats. This is not an exhaustive list, but represents the most common situations where disclaimer is appropriate.
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