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Buying 'bona vacantia' land from a dissolved company

View profile for Brendon Lee
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If you want to acquire and develop neighbouring land or an adjacent highway but the company landowner has been dissolved, it’s important to know your options.

Here’s the scenario. You have an interest in purchasing unused land suitable for development. Maybe it is something small like a house extension or widening of your garden, maybe something bigger. It could be subject to redundant highway rights which the local council agrees can be extinguished. You haven’t the evidence to claim ownership by adverse possession. However, you know the company that owned it and would be happy to buy the land at its market value. 

The only problem is that the company has been dissolved. However, hope is not lost.

There are two categories within which the land of dissolved companies may fall, and both of which will need to be considered and investigated. Each is discussed below.

  1. Lost property - Bona Vacantia

In accordance with the Companies Act 2006, when a company is dissolved then all its property, assets and cash owned at such time are automatically passed to the Crown. This includes any interest in land. Any such property so vested in the Crown is known as ‘bona vacantia’ or lost property.

A company may be dissolved in two ways: the Registrar of Companies can strike off a company for failure to comply with its legal obligations; or a company can be dissolved after a formal liquidation by its members and creditors. On the latter, only property not transferred or disclaimed by the liquidator will become bona vacantia.

Importantly, if the Crown does not wish to hold specific land in bona vacantia then it has the powers to disclaim such land. If land is disclaimed, it will no longer be bona vacantia and its tenancy in fee simple comes to an end. This is known as ‘escheat’. The Crown generally disclaims problematic or low value land such as freehold of adopted highways.

If land is bona vacantia and held by the Crown, then there are two options for you to acquire it:

  • if you can identify and locate the former members or liquidator of the company, then they could ‘restore’ the company. The land will then no longer be bona vacantia and you could agree to purchase the land from the ‘restored’ company;
  • you could apply direct to the Crown to purchase it from them at market value.

Enquiries about purchasing land held in bona vacantia should be addressed to the Treasury Solicitor unless the company’s last registered office and its assets are within the counties of the Duchies of Cornwall or Lancaster for which the Duchies’ solicitors, Farrer & Co, are appointed.

  1. The ending of Tenancy in Fee Simple - Escheat

English land law is based on a system of tenure. A freeholder is not an absolute owner but a ‘tenant in fee simple’ holding, in most cases, the land directly from the Sovereign (as lord paramount of all the land in the realm). In England, the Sovereign will be the Crown Estates or the Duchies of Cornwall or Lancaster for those counties.

When the tenant in fee simple comes to an end, the Sovereign is entitled (but not obliged) to take possession of it. This is known as ‘escheat’.

There are several ways in which land may become subject to escheat:

  • bona vacantia land being disclaimed by the Crown as discussed above;
  • the trustee in bankruptcy or Official Receiver (for individuals) or the liquidator (for companies) disclaim the land vested in bankruptcy or liquidation as applicable;
  • remaining land owned at the time of dissolution of foreign companies, statutory companies and Industrial and Provident Societies (or Friendly Societies).

Generally, the Sovereign will be willing to dispose of land which is the subject of escheat to an appropriate purchaser at the market value.

Enquiries about purchasing land subject to escheat should be addressed to the Crown Estates’ appointed solicitors, Burges Salmon, unless the land is in the Duchies of Cornwall or Lancaster for which the Duchies’ solicitors, Farrer & Co, are appointed.

Legal Advice

Should you require any assistance in investigating and acquiring land held in bona vacantia or subject to escheat, so as to facilitate development then Buckles Solicitors will be happy to assist.