Share of freehold TR1

freeholderlondon

Hello folks,

I am several months into the selling process and I have finally reached the point at which we might exchange contracts.  However, we have encountered a problem.

we live in a block of four flats, where as original freeholders we all had an equal share in our personal names.  Last September the lady above me sold her flat and the person who has bought it has registered her share in her limited company (she is a sole director).  Now, we had the TR1 for the freehold all ready thinking everyone still had their share of the freehold in their personal names but this company element has really put a spanner in the world and my solicitors seem really stressed about it. 

How do we resolve this issue?  Do we need a new TR1 with new ID for the company element? Any help greatly appreciated from this very stressed lady. 

loubel

What issue needs to be resolved? The transferors on the TR1 needs to match the ownership on the title register. If that is 3 individuals and a company then that's what it needs to say. I'm not clear why this is an issue for your solicitor.

poseidon1

freeholderlondon said:

Hello folks,

I am several months into the selling process and I have finally reached the point at which we might exchange contracts.  However, we have encountered a problem.

we live in a block of four flats, where as original freeholders we all had an equal share in our personal names.  Last September the lady above me sold her flat and the person who has bought it has registered her share in her limited company (she is a sole director).  Now, we had the TR1 for the freehold all ready thinking everyone still had their share of the freehold in their personal names but this company element has really put a spanner in the world and my solicitors seem really stressed about it. 

How do we resolve this issue?  Do we need a new TR1 with new ID for the company element? Any help greatly appreciated from this very stressed lady. 

Unless the purchaser is a buy to let landlord operating via a limited company or a wealthy non dom acquiring expensive central London property via a UK or offshore company, it is most unusual to be acquiring a bog standard residence for your own occupation via a limited company.

When faced with  corporate acquisition situations , conveyancers face an enhanced level of due diligence prior to registering the TR1 transfer, by having to be satisfied as to the  true beneficial ownership of the company.

Historically UK property has been a favoured repository to money launder and hide proceeds of crime. Companies ( both UK and offshore) have been vehicles to help obscure and hide true criminal ownership - see article below

https://www.theguardian.com/uk-news/2015/jul/25/london-housing-market-launder-offshore-tax-havens

In the present case the lady being sole director is irrelevant, it is the shareholder's identity which is in point ( you can be a director without being a shareholder).

Assuming this is a UK company, Companies House records maybe able to mostly satisfy the question as to 'persons with significant control' in that the lady sole director should also be listed as the sole owner. If she is not, then further questions are required in order to pierce the corporate veil to determine who is the real company owner, and therefore the true beneficial owner of the property in question. This excercise becomes exponentially more difficult if the company is offshore in regions that refuse to share information and co operate with UK authorities.

Have to wonder if the the conveyancers acting for the lady purchaser, failed in their own due diligence thereby leaving your conveyancer with more work to ensure your little collection of flats is not being infiltrated by someone acting on behalf of an undisclosed beneficial owner.