The penultimate article in our post-completion series from PCC Education Hub’s Priscilla Sinder and Maria Hardy provides an overview of requirements when acting in a disposition which concerns an overseas entity.
The Economic Crime (Transparency and Enforcement) Act 2022:
HM Land Registry practice guide 78 defines an ‘overseas company’ as a company that is incorporated outside the UK.
The Economic Crime (Transparency and Enforcement) Act 2022 (Act) came into force on 01 August 2022 and created a Register of Overseas Entities which is maintained by Companies House.
The Act amends the Land Registration Act (LRA) 2002 by inserting a new schedule 4a, which restricts dispositions and prevents registering an overseas entity as proprietor of ‘qualifying estates’. A qualifying estate means a freehold or leasehold property with more than seven years from the date of the grant.
The Act requires overseas entities that own land in the UK or are intending to acquire property in the UK to register with Companies House, unless they are exempt. The company is also required to provide information about their beneficial owners or managing officers and to update this information annually, or when a specific notice is issued by Companies House.
On registration with Companies House, a unique overseas entity ID (OE ID) is allocated for each overseas entity, and this OE ID is required when registering a disposition with HM Land Registry.
The purpose of this new requirement is that HM Land Registry needs to be satisfied as to the company’s corporate status and its powers of dealing with land in England and Wales before it can be proprietor of an estate.
The Act only applies to overseas entities that were registered as proprietor of a qualifying estate on or after 1 January 1999.
How to avoid requisitions
When registering an overseas entity as proprietor a valid OE ID is required (paragraph 2 of Schedule 4A to the LRA). The OE ID will be entered into the proprietorship register, thus compliance with this restriction is necessary in order for the overseas entity to dispose of its property.
Your application will be rejected if the OE ID is not valid.
If a valid OE ID is not provided, then:
- A certificate OE1 by a conveyancer confirming what exceptions in paragraph 3(2) of schedule 4A of the LRA 2002 applies; or
- A certificate OE2 specifying what exceptions apply under paragraph 4(2) of schedule 4a LRA applies.
Exceptions
If reliance on a certificate OE1 or OE2 is supplied then a valid OE ID will not be submitted with your application; in a nutshell some of the exceptions are as follows:
- The estate is not a qualifying estate.
- The OE was registered before 1st January 1999.
- The application is subject to a court order.
Restrictions
When reviewing the official copy of register of title, the restriction below will identify that your transaction is subject to schedule 4a of the LRA 2002 requirements and thus you must raise an additional enquiry requesting evidence of a valid OE ID or certificate OE1 or OE2 to ensure registration can proceed smoothly.
‘[Name of Company] (incorporated in [territory of incorporation]) (OE ID: OExxxxxx) (UK. Regn. No. [FCxxxxxx]).’
If the OE is no longer the registered proprietor HM Land registry will automatically cancel the restriction.
Registration of an overseas entity as a new proprietor on a registered title
Furthermore, HM Land Registry needs to be supplied with (in addition to the usual registration documents):
- A form 7 certificate completed by a qualified lawyer practicing in the territory of incorporation of the overseas company, or
- A certified copy of the charter, rules, statute, memorandum and articles of association or other documents constituting the company (Rule 183 Land Registration Rules (LRR) 2003).
HM Land Registry may accept a legal opinion letter instead of one of the forms of evidence required by Rule 183 LRR 2003 if it conclusively provides all the information required by form 7 and is neither qualified nor conditional.
A form 7 certificate confirms that the lawyer is qualified to practice in the given territory and they have such knowledge to give the form 7 certificate, which confirms the overseas company has no limitations on its power to hold, mortgage, lease and otherwise deal with, or to lend on a mortgage or charge of, land in England and Wales.
Any documents provided to HM Land Registry that are not in English or Welsh must be accompanied by a certified or notarised translation.
Updating duty
Schedule 4A of the LRA 2002 section 7 imposes an ‘updating duty’ on an OE, which means each OE must confirm or update the information on the Register of Overseas Entities at least every 12 months.
A breach of this duty is an offence imposed by fines on the company under section 8.
Source of material: https://www.gov.uk/government/collections/land-registration-practice-guides
Licence: This content is available under the Open Government Licence v3.0 2024
About the authors
Priscilla Sinder qualified as a solicitor in 2005 and began her career in private practice. She moved into an in-house role soon after qualification and was appointed as manager of residential conveyancing and then head of post-completion. With the diverse experience obtained she gained a role as a partner of a boutique property firm in central London, leading to her final role as a practicing solicitor in a large nationwide conveyancing firm as a director. Throughout her career she always noticed post-completion departments lacked resources and the attention they deserved. In a bid to change this, the seed for PCC was planted in 2017 where Priscilla embarked on a journey to change the way post-completion was viewed by the industry. This then gave rise to the birth of the Hub in 2024. Priscilla is also the author of Client Care in Conveyancing and co-author of Post-completion: A Conveyancer’s Guide to Process, Risk and Compliance, 1st Edition, published by the Law Society.
Maria Hardy is the company trainer and technical specialist at the PCC Education Hub. She has 20 years’ experience in the residential conveyancing profession, the majority of which has been spent focusing on post-completion duties. Maria started her career in 2005 after completing her LLB at the University of Newcastle upon Tyne. Prior to working at the hub, her early career was spent working in professional negligence, and from 2014 to 2023 Maria was head of post-completion and the compliance officer for a large residential conveyancing firm. She then became manager at PCC from 2023 – 2024. Maria’s vast experience allows her to specialise in post-completion, risk, compliance and training.
