Property seller an offshore company

JonMitchell

Hi 

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers, is there any legal complications that as a buyer should watch out for? For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

Was wondering are there any potential loopholes that as buyers should be of concern of?

Thanks all. 

dimbo61

Speak to your solicitors
Listen and read everything they give you very carefully.
Estate agents ? High street or online ?
Viewed the property?
Checked the Land registry?

JonMitchell

dimbo61 said:

Speak to your solicitors
Listen and read everything they give you very carefully.
Estate agents ? High street or online ?
Viewed the property?
Checked the Land registry?

Via a high street estate agent.

eddddy

JonMitchell said:

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers,

You seem to be looking at 2 different scenarios:

- A property owned by an offshore company

- A property owned by a non-domiciled person/seller

I guess a key risk with a property owned by an offshore company is that if they breach the contract in some way, it might be difficult to sue them for any losses.

But you might be able to get a guarantee from somebody in the UK - i.e. the person who 'controls' the offshore company.

(That's probably not an issue for buying from a 'non-dom'. You can probably sue them just like anyone else.)

JonMitchell said:

For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

I'd guess that the person filling in the questionnaires would normally have been living in the property - even though they own it through an offshore company, or they're a 'non-dom'. So they should be able to answer any pre-contract enquiries.

If that's not the case, I guess it's like when an investor or landlord sells a property. There may be some questions they can't answer. 

user1977

No particular reason why a vendor would know less about a property just because they're registered offshore - they'll have the same knowledge as any other landlord, and have local agents (or the ultimate owners may even be local themselves).

What your solicitor ought to advise you though is that you should get a foreign opinion i.e. a letter from a lawyer in the relevant jurisdiction confirming to you that the company is properly registered, has the power to own and sell property, isn't insolvent etc. That'll be at the vendor's expense, though your own solicitor is likely to regard the time taken to review and advise you on the foreign opinion to be an extra in terms of their own fees.

JonMitchell

eddddy said:

JonMitchell said:

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers,

You seem to be looking at 2 different scenarios:

- A property owned by an offshore company

- A property owned by a non-domiciled person/seller

I guess a key risk with a property owned by an offshore company is that if they breach the contract in some way, it might be difficult to sue them for any losses.

But you might be able to get a guarantee from somebody in the UK - i.e. the person who 'controls' the offshore company.

(That's probably not an issue for buying from a 'non-dom'. You can probably sue them just like anyone else.)

JonMitchell said:

For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

I'd guess that the person filling in the questionnaires would normally have been living in the property - even though they own it through an offshore company, or they're a 'non-dom'. So they should be able to answer any pre-contract enquiries.

If that's not the case, I guess it's like when an investor or landlord sells a property. There may be some questions they can't answer. 

Thanks.

The property that I was looking at is owned by a non-domicile offshore ltd company, as what I was informed by the estate agent. The estate agent currently manages the seller's property portfolio.

JonMitchell

user1977 said:

No particular reason why a vendor would know less about a property just because they're registered offshore - they'll have the same knowledge as any other landlord, and have local agents (or the ultimate owners may even be local themselves).

What your solicitor ought to advise you though is that you should get a foreign opinion i.e. a letter from a lawyer in the relevant jurisdiction confirming to you that the company is properly registered, has the power to own and sell property, isn't insolvent etc. That'll be at the vendor's expense, though your own solicitor is likely to regard the time taken to review and advise you on the foreign opinion to be an extra in terms of their own fees.

So in essence, legal fees is likely to be higher as a buyer then?

SDLT_Geek

JonMitchell said:

Hi 

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers, is there any legal complications that as a buyer should watch out for? For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

Was wondering are there any potential loopholes that as buyers should be of concern of?

Thanks all. 

You should look out for the incoming requirement for overseas companies to register as an overseas entity.

As a buyer you are likely to need your seller to be registered if you are to get good title.

Edit: here is a link to some guidance https://www.gov.uk/government/publications/overseas-companies-and-limited-liability-partnerships-pg78/practice-guide-78-overseas-companies-and-limited-liability-partnerships  That suggests there is a transitional period, so it depends on whether the purchase completes by 31 Jan 2023.

JonMitchell

SDLT_Geek said:

JonMitchell said:

Hi 

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers, is there any legal complications that as a buyer should watch out for? For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

Was wondering are there any potential loopholes that as buyers should be of concern of?

Thanks all. 

You should look out for the incoming requirement for overseas companies to register as an overseas entity.

As a buyer you are likely to need your seller to be registered if you are to get good title.

Edit: here is a link to some guidance https://www.gov.uk/government/publications/overseas-companies-and-limited-liability-partnerships-pg78/practice-guide-78-overseas-companies-and-limited-liability-partnerships  That suggests there is a transitional period, so it depends on whether the purchase completes by 31 Jan 2023.

I purchased the title deed and noted the property was already under this offshore company since 1995. Though the boundary map looks like it need updating. 

From the TD, this offshore firm purchased a plot of land and built properties on it, think between 95-97, completed 1997ish. 

I did a quick search on the local council planning and could find any info in regard to planning permission, building completion etc. Presumed it was too early for council database?

JonMitchell

SDLT_Geek said:

JonMitchell said:

Hi 

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers, is there any legal complications that as a buyer should watch out for? For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

Was wondering are there any potential loopholes that as buyers should be of concern of?

Thanks all. 

You should look out for the incoming requirement for overseas companies to register as an overseas entity.

As a buyer you are likely to need your seller to be registered if you are to get good title.

Edit: here is a link to some guidance https://www.gov.uk/government/publications/overseas-companies-and-limited-liability-partnerships-pg78/practice-guide-78-overseas-companies-and-limited-liability-partnerships  That suggests there is a transitional period, so it depends on whether the purchase completes by 31 Jan 2023.

Might that be a reason why such sellers are offloading their  UK properties? Ie registering themselves 

user1977

JonMitchell said:

SDLT_Geek said:

JonMitchell said:

Hi 

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers, is there any legal complications that as a buyer should watch out for? For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

Was wondering are there any potential loopholes that as buyers should be of concern of?

Thanks all. 

You should look out for the incoming requirement for overseas companies to register as an overseas entity.

As a buyer you are likely to need your seller to be registered if you are to get good title.

Edit: here is a link to some guidance https://www.gov.uk/government/publications/overseas-companies-and-limited-liability-partnerships-pg78/practice-guide-78-overseas-companies-and-limited-liability-partnerships  That suggests there is a transitional period, so it depends on whether the purchase completes by 31 Jan 2023.

Might that be a reason why such sellers are offloading their  UK properties? Ie registering themselves 

Doubt it, and in any event they're too late to avoid it now - will need to be done in order to complete any sales.