Western Morning News 31 July 2003

31/07/2003

Gavin Poole, Partner of Follett Stock solicitors, considers impending changes in Land Registration which will affect your property.

Question:
I own a property, title to which is registered at HM Land Registry. I am told that my bank no longer needs the old deeds. Is this right? Do I need to look after them? Can they be thrown away?

Answer:
Under current law, you need to hang on to your land certificate (buff coloured) or (if the property is mortgaged) your charge certificate (blue or sometimes, grey). By way of background (and this is still the case if your land has not been registered at H M Land Registry) the title to your property is evidenced by a collection of deeds. So, every time there is a transaction affecting the property another deed is added to the ever increasing pile of deeds. The land or charge certificate issued by H M Land Registry is a summary of that collection of deeds. Whilst ownership of registered titles is evidenced by the land/charge certificate, it is worth keeping the collection of deeds (the pre registration deeds) in a safe place in case, for whatever reason, reference needs to be made to those deeds. Human error in summarising the deeds cannot be ruled out!

From 13th October 2003, even the land/charge certificate will no longer be required. On that date, the Land Registration Act 2002 will come into force. The Act has been drafted as a response to a Law Commission Report under which it was intended that:

"The register should be a complete and accurate reflection of the state of the title to the land at any given time, and it should be possible to investigate title to land online, with the absolute minimum of additional enquiries and inspections”

The principle behind the Act is therefore that title (ownership) is shown by registration and not by possession. In time, solicitors and others with the appropriate technology will be able to look at titles on screen.

It is therefore imperative that the title certificate accurately reflects all the rights in favour of the property and the burdens affecting the property. It is well worth having a look at your land/charge certificate now to ensure that is the case. Consider paths across yards or back gardens, side passages, shared driveways, combined drainage, rights and obligations set out in leases and so on. Consider every part of your property and the extent to which any part of it relies on a permission from your neighbour or where you have given permission to your neighbour to do something.

If you think anything needs to be added to your land/charge certificate, you need to see a solicitor as soon as possible.

Question:
I am a shareholder in a company run by other family members. I fell out with my family last year. Now no one is telling me what is going on in the company. Everyone else seems to be making money from the company except me and I suspect that I am losing out somehow. What can I do?

Answer:
The first step is to get hold of the company’s accounts and annual returns to see if they show that your suspicions are well-founded. As business solicitors we can get hold of that information very quickly on-line.

The court has wide-ranging powers to look into how companies operate if the rights of minority shareholders are being affected. If you, as a shareholder, can show that the company’s affairs are being conducted in a way that unfairly prejudices your interests then you can apply to the court for an order that you are compensated.

It is an aggressive thing to do and can be difficult to achieve, but it can put the company or its officers under a lot of pressure. The mere threat can sometimes be enough to persuade a company that has been misbehaving to stop misbehaving and provide some compensation. It is well worth discussing it further with a specialist business lawyer.

Martin Pearse is a Commercial Litigator and Partner of Follett Stock solicitors