Is your freehold landlord a dissolved company? – Exploring Bona Vacantia

Where a freehold title is registered in the name of a dissolved company, there is no legal owner because the company no longer exists. The freehold automatically becomes bona vacantia (“ownerless property”) and ownership passes to the Crown. If the dissolved company is later restored to the Register of Companies, it is deemed to have continued in existence, and ownership of the asset reverts to the company.

A bona vacantia freehold can create difficulties for leaseholders. Tenants often require their landlord’s consent to assign or sublet their lease, keep a pet, or carry out alterations. Leases also commonly require notice of dealings to be served on the landlord. In addition, a leaseholder seeking a lease extension would ordinarily need to apply to the freeholder.

Responsibility for bona vacantia property generally lies with the Treasury Solicitor, although this depends on the property’s location. Neither the Crown nor the Treasury Solicitor will have actual knowledge of the property. They will not manage or insure it, grant consents, or agree lease extensions.

It is possible to purchase the freehold from the Crown, although a specific procedure must be followed. The Crown will not sell the property for less than its market value and will provide no title guarantee. The purchaser must also contribute towards the Crown’s legal costs, together with VAT and disbursements, which may include a valuation fee. These costs are payable whether or not the transaction completes.

Where the leaseholders are members of a management company, the company may act as the nominee purchaser. Specialist tax advice should be taken to determine the most appropriate structure for holding the freehold, including whether the title should be held on trust for the benefit of the company’s members.

Once the purchase has completed and the title has been registered, consideration should be given to extending any leases that have not already been extended.

If it is not possible to acquire the freehold from the Crown, a leaseholder may apply to the court for a lease extension under sections 50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993.

SE-Solicitors advise clients about Bona Vacantia properties. For more information about our Property Portfolio Management services, including Debt Recovery, please click here.