Understanding Bona Vacantia: ownerless land and key issues for developers.

Bona Vacantia means "ownerless goods".

When a company is dissolved, any property it beneficially owned immediately before dissolution passes automatically to the Crown. The Treasury Solicitor acts for the Crown in relation to Bona Vacantia matters. In practice, the responsibility lies with the Bona Vacantia Division (“BVD”) of the Government Legal Department.

The impact of Bona Vacantia on developers

When land owned by a dissolved company is required for site assembly purposes or to secure an easement for the supply of services it can add lengthy delays and increased costs to a development project. It is important for developers to understand the potential impact of ownerless land on the development project and the potential options available to it to resolve the issue.

Options

Some of the options available to developers to overcome issues around ownerless land include:

• Restoration of the Company – in limited circumstances an application can be made to restore a recently dissolved company to the register of companies at Companies House.  If restoration is successful then (provided that the Crown has not already disposed of the land) the land will automatically transfer back to the ownership of the company.  The land can then be acquired from the company in the usual way.
• Adverse Possession - adverse possession of the ownerless land can be claimed by an adjoining landowner (and if successful, the title transferred on to developer). The same rules apply as for normal adverse possession matters, save that the period of occupation and use is extended to 30 years.
• Purchase of land from the BVD – you can write to the BVD to request to purchase the land.  Any sale by the BVD has to be at market value and the developer will have to cover the department’s legal costs and also any costs incurred in appraising the value of the land.  However, if the land in question is subject to common use, onerous covenants or mortgages the BVD may determine to disclaim its interest in the land at which point the land will be subject to Escheat (which terminates all interests in the land) and it will not be possible to acquire any interest in the land from the BVD.
• Purchase of land following Escheat – land subject to Escheat is owned by the Crown.  The Crown Estate can be approached to seek a transfer of the land. The Crown Estate is not however obliged to sell the land. Unlike the BVD, it can hold land for a limitless period and will only sell land in limited circumstances. In addition, any sale will be subject to mortgages, legal charges or other encumbrances which exist against the former freehold interest. As with a sale from the BVD the developer will be required to acquire the land at market value and pay the Crown Estate’s legal and valuation costs.

Conclusion

In conclusion, Bona Vacantia presents a unique challenge for developers. Understanding the implications of ownerless property and navigating the legal intricacies involved can help developers mitigate risks and avoid project delays.