Registration requirements for dealings with certain real estate transactions
Overseas entities (OE) will now be aware that they are required to be registered on the register of overseas entities at Companies House (ROE) if they wish to transfer, charge or grant leases of over seven years of properties in England or Wales registered at the Land Registry on or after 1 January 1999 by virtue of the Economic Crime (Transparency and Enforcement) Act 2022. They must also be on the ROE if they wish to make an application to the Land Registry to register any transfer to them of a freehold or transfer or grant to them of a lease of over seven years of a property in England or Wales, unless in any case an exception applies.
To enable registration at the Land Registry of a relevant dealing with a property in England or Wales, the registration of the OE on the ROE must be valid, in the case of;
- a relevant a disposition - at the time of the disposition.
- a relevant acquisition - at the time of the application to register the acquisition; and
- a charge granted by an OE - at the time of the grant of the charge.
Requirements to maintain validity of OE registration on the ROE at Companies House
When an OE is registered on the ROE at Companies House an OE is issued an OEID which has to be provided to the Land Registry when a relevant application as referred to above is made. The registration at Companies House and OEID must be valid to enable the Land Registry to complete the application for registration.
To maintain validity two duties must be complied with.
Duty One
From 16 January 2023 an OE must comply with an annual updating duty within 14 days after each update period, being 12 months after initial registration and each anniversary of that date.
A registered OE can choose to shorten an update period, then if it does the timing of subsequent annual updates is adjusted accordingly.
Duty Two
From 4 March 2024 an OE has a duty to provide information if served with a notice under section 1092A of the Companies Act 2006 (CA 2006) (new provision inserted by the Economic Crime and Corporate Transparency Act 2023).
That new provision permits the Registrar of Companies (Registrar) to send a notice requiring a person to provide information to it, enabling the Registrar to determine whether:
- a person has complied with a statutory obligation to deliver a document to the Registrar;
- any information contained in a document received by the Registrar falls within section 1080 (1)(a) CA 2006 (which provides that the Registrar shall continue to keep records of the information contained in documents delivered to it under any enactment).
An OE which fails to comply with the duties from the dates referred to above is not treated as a "registered overseas entity" and as such does not have a valid OEID until it remedies the failure.
How is failure to comply with duties remedied?
The relevant failure is remedied when the updating duty has been complied with and/or the failure to comply with requirements of the s.1092A notice has been remedied, as applicable.
Be vigilant
OEs need to ensure they have procedures in place and the information required to comply with the updating duty within the prescribed timescale and to respond to any Section 1092A notices promptly and within any timescale notified, failure to do so will jeopardise their dealings with property in England and Wales and may also constitute a criminal offence.
Client Alert 2024-072
