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Bona Vacantia - Acquiring ownerless land
- AuthorCharlotte Payne
You may be wondering what your options are when it comes to acquiring land from a dissolved company? Or an individual who died intestate and without relatives to inherit the land?
Charlotte Payne, a trainee solicitor in Warner Goodman’s residential property litigation team, reviews your options.
When a company is dissolved, any property owned immediately before such time automatically passes to the Crown. This property is known as Bona Vacantia (‘ownerless goods’). Unless the last registered office address of the dissolved company is located in Lancaster or Cornwall, where the Duchy of Lancaster or the Duchy of Cornwall are responsible respectively, the Crown is responsible for dealing with bona vacantia.
More commonly, a company’s property will become bona vacantia when the Registrar of Companies strikes the company’s name off the register or the company fails to dispose of all of its property before undertaking a voluntary strike off.
In the case of an individual, where the property-owner did not make a will before they passed away and there are no known relatives to inherit the property, it will also become bona vacantia.
The Crown is not obliged to register itself as the owner of the property and may disclaim title to bona vacantia or sell for full market value. If the Crown has not disclaimed title, you have the option of approaching the Crown to purchase the property at market value, or you could approach the former members of the dissolved company and request the company be restored in order to sell the land, which will no longer be bona vacantia. In reality, the latter option may prove impractical.
If the Crown disclaims title to bona vacantia, it is usually to protect the Crown against any risks or liabilities that arise in respect of the property. In the case of freehold land, the freehold title will be extinguished and the Crown Estate becomes entitled to take possession of it. This is known as Escheat. Freehold land will also escheat to the Crown Estate where a liquidator disclaims freehold land belonging to a company in liquidation or where a foreign company that owned freehold land in England or Wales or Northern Ireland no longer exists. An investigation will be required to establish which category the dissolved company’s land falls into.
In the case of freehold land which is subject to a lease, whilst escheat does not terminate the lease, the Crown Estate will not assume any liabilities or obligations of the landlord under the terms of the lease. This can prove problematic for leaseholders who may be unable to insure the building without landlord consent or where repairs to the building are required. Additional problems may arise in respect of mortgage lenders, who will want to be certain that their security in the lease is protected.
It is important to note the Crown Estate is not obliged to sell the freehold property, nor is it required to sell the property at less than market value. However, the Crown Estate will generally consider selling to an appropriate buyer for a fair and reasonable price.
For further advice in relation to acquiring bona vacantia land or land subject to escheat, you can contact Helen Porter, a partner in our commercial litigation and dispute resolution team on 023 8071 7425 or by email firstname.lastname@example.org