Yearly Archives: 2022

Royal Assent was given to create the Economic Crime (Transparency and Enforcement) Act 2022 (the Act) on 15 March 2022. The new Act requires Companies House to set up and maintain a new public register of the beneficial owners of non-UK entities that own UK land, which will be known as The Register of Overseas Entities (the Register).

It’s estimated that 95,000 UK properties are held by overseas companies. The Act intends to address concerns around the lack of transparency as to who owns the land when an overseas entity is listed as the registered owner with HMLR.

The objective of the Act is to prevent the use of UK property either to launder money, finance terrorism or invest the proceeds of other unlawful activities.

Where an overseas entity wishes to own UK land, it will need to identify and list its beneficial owners much like the present PSC process. Generally, if a beneficial owner holds 25% or more of the shares or voting rights, or if they can appoint or remove a majority if its directors, or have the ability to exercise some other significant influence or control over the entity, then they will need to be included on the Register.

The Act will change land registration procedures to impose restrictions that prevent dealings in the UK land. These will significantly strengthen the incentive on overseas entities and those dealing with them to ensure compliance with the Act but raise additional transactional steps that will need to be overcome.

Work on the implementation of the Register is underway, and we at Feltons welcome this move.

Once the Register’s launch date is known, overseas entities who already own land in the UK will be given 6 months to register their beneficial owners or managing officers.

We can assist with the registration process.

Please contact Paula Felton if you require further information:
pfelton@feltonssolicitors.co.uk

The existing tenant may be asked to enter into an Authorised Guarantee Agreement (AGA) which requires them to guarantee the performance of the lease covenants by the assignee.

Under an AGA if the assignee does not pay the rent or breaches other covenants, the landlord could ask the departed tenant as a guarantor to pay any outstanding rent or remedy the breach.

Underletting is where the existing lease remains in place, but the tenant under-leases the whole or part of the property to a third party. The existing tenant becomes the landlord of the third party and remains the tenant bound under the existing lease.

Surrender is where you give the property back to the landlord and the lease ends at that point. You may be able to negotiate with the landlord for the surrender of the lease. It is up to the landlord to agree to a surrender and the landlord may require the payment of a lump sum to do so.

This is an area where it’s best to take legal advice when negotiating these terms into a lease you are taking on as well as when you are trying to exit. Advice on break clauses, AGAs, assignments and other matters can save a business many thousands of pounds.

Please contact our commercial and residential property specialist solicitors Paula Felton or Beverley Obrart if you would like to discuss this further. Paula and Beverley have over 60 years combined experience in this area.

pfelton@feltonssolicitors.co.uk

bobrart@feltonssolicitors.co.uk

Land Registry delays in processing applications have been causing chaos in the property sectors. There is concern as to why applications that have been submitted have not been completed amongst purchasers and lenders.

The Land Registry have been operating with significant delays since before the pandemic, but this has been exacerbated in the past year. An application can sit for a year waiting to be processed and then when it is requisitions are raised with a relatively short time being provided for them to be answered.

This can cause delayed refinances, landlord’s being unable to grant leases because their purchase has not been registered, developers being unable to sell new houses, landlords being unable to serve notices.

Where a delayed application is causing financial hardship the conveyancer can ask the Land Registry to expedite the application. However, it is imperative that evidence of the hardship is submitted otherwise the request will be instantly dismissed by the Land Registry. If there are queries with the application and requisitions raised, these will need to be dealt with.

A purchaser of a legal title does not become the legal owner of the property until they are registered as proprietor at the Land Registry. In the interim period the seller is the registered owner and the purchaser is the owner in equity. The seller holds the property on trust for the equitable owner until registration is completed.

If you are experiencing a significant delay in receiving your registration documents it is worth checking in with your solicitor to see what if anything can be done to speed it up. We hope these delays clear up soon.

Paula Felton

UHNW Property Specialist