Who owns paper shares found in new house?

jordanjim

We recently bought a repossessed house and the bank gave the owner until the completion date to move any of his belongings that he wanted. If the bank decided not to remove and sell the contents then part of the purchase agreement was that we would buy the house as is, with all contents included.

On the completion date the previous owner had decided not to retrieve anything and the bank told us everything was ours to dispose of as we wished. While sorting out we came across some old paper shares that the previous owner had inherited from a relative.

We haven't checked into them but doubt they're worth much so this is mostly a question out of curiosity. Who would now be the legal owner of the shares?

bowlhead99

jordanjim wrote: »

We haven't checked into them but doubt they're worth much so this is mostly a question out of curiosity. Who would now be the legal owner of the shares?

A share certificate is a piece of paper which certifies that at the date of printing the certificate, the person named on the certificate was listed on the register of members of the company as owning the number of shares shown on the certificate.

So it's a statement that (e.g.) five years ago, John Smith was listed in a register which is maintained by the company secretary or registrar at their office, as owning five thousand ordinary shares.

So, whether or not the bank had the legal right to sell you a piece of paper that displays that statement, which had been abandoned in their house - it wouldn't give you any ownership rights over the shares. The owner of the shares is recorded in the company's books and records at their head office and the certificate you 'bought' is simply a piece of paper certifying that. And the certificate may not be current anyway.

For example, I am the registered keeper of my car, and have a V5C registration document which shows that DVLA have recorded me as being the registered keeper. If I am careless and accidentally lose that piece of paper, or leave it in a box of jumble which gets sold to the highest bidder, I have made it more difficult to sell my car because a prospective purchaser may not believe my statement that I am the owner and registered keeper. But the actual register of keepers is on a computer at DVLA's office in Swansea. You don't become the registered keeper (or owner) of my car just by owning the piece of paper casually known as its "log book", which I can get reprinted at any time, at my cost.

Owning that car log book would make it slightly easier for you to commit fraud by pretending to DVLA that you had bought my car from me and wanted to re-register the car in your own name. However without any documentation to support the sale, you would be found out eventually. Similarly with the share certificate in your possession you could fake up a transfer document and inform the company registrar that John Smith had gifted you the shares. It would be a lie though, and you would be found out when Mr Smith later asserts that he never did and that you had forged his signature. That's if the registrar didn't simply turn around and say to you, "hang on, Mr Smith sold his shares to Mr Jones four years ago, you're blatantly a fraud".

PeacefulWaters

The ownership of the shares remains as it was before you became owner of the house.

It's not quite the same as a pair of curtains left behind.

saver861

The same way as if they had left the TV licence. Its a licence to the person - not the house. You would not be able to claim ownership of the TV licence - neither would you be able to for the shares.

gingercordial

jordanjim wrote: »

We recently bought a repossessed house and the bank gave the owner until the completion date to move any of his belongings that he wanted. If the bank decided not to remove and sell the contents then part of the purchase agreement was that we would buy the house as is, with all contents included.

On the completion date the previous owner had decided not to retrieve anything and the bank told us everything was ours to dispose of as we wished. While sorting out we came across some old paper shares that the previous owner had inherited from a relative.

We haven't checked into them but doubt they're worth much so this is mostly a question out of curiosity. Who would now be the legal owner of the shares?

As a slightly pedantic point there are such things as "bearer shares" where the ownership is actually with whoever has the physical bit of paper in his hand and there is no central register of owners.

The chances of the OP having found a stack of bearer shares is, I agree, pretty remote!

jordanjim

Thanks for the replies, we weren't sure how it worked and google was failing us. We're not sure if the previous owner was aware of the shares (they were found in a box of old letters) so we contacted the bank today to see if they had a forwarding address for him. Unfortunately it seems that he has already moved again so they might have a problem tracking him down.

bowlhead99

As he's the type of person who abandons his house and leaves the bank to sell it off to try to recoup their losses, he might not be the type to stick around at the same address for long. The shares will probably either have already been sold, or perhaps not sold because it would cost more to sell than they're worth. Either way, it's fair to say he's probably not bothered.

gingercordial wrote: »

As a slightly pedantic point there are such things as "bearer shares" where the ownership is actually with whoever has the physical bit of paper in his hand and there is no central register of owners.

The chances of the OP having found a stack of bearer shares is, I agree, pretty remote!

Especially as they were found in a UK house and changes to the Companies Act a while back mean that no UK incorporated companies can have them any more; other countries have similarly outlawed them or introduced rules that they must be lodged with a custodian or lawyer who holds a record of who they're holding them for...

atush

If however, the shares have been sold, or the company no longer exists, there could be value in the paper as a collectible.

In this case you would have ownership the same as any other items left behind.

Radiantsoul

I think you probably want to stick them in the recycling bin!