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General => The Common Room => Topic started by: Jane Masri on Tuesday 02 October 12 09:07 BST (UK)
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I'm researching the history of our family house in London. Fortunately I have an agreement signed by my great grandfather for the purchase of this house in 1931. The vendor is selling as, 'Beneficial Owner'. Wikepedia gives this definition, 'Beneficial owner is a legal term where specific property rights ("use and title") in equity belong to a person even though legal title of the property belongs to another person. Black's Law Dictionary (2nd Pocket ed. 2001 pg. 508). This often relates where the legal title owner has implied trustee duties to the beneficial owner.'
I know that the vendor was an estate agent by profession but the previous owner doesn't seem to have any family ties to this man & there's no evidence that the vendor lived in this house. Could he have bought the house as an investment & later sold it, would that make him a beneficial owner? Can someone explain a possible scenario?
Jane
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Someone held the legal title to the property (a sort of protection) but another person had the use of it.
A quick look on google gives this for example
http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm04441.htm
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It reminds me a bit of 'squatter's rights' where who owned the property is lost (died without anyone to inherit for eg) and so whoever lived in the property had the beneficial interest. And could in time get the legal interest.
The estate agent might have just rented the property out until he had legal rights, when he then sold it. I'm not sure if you can just sell beneficial ownership. Anything's possible I suppose.
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Thanks silvery. I wonder if the lady who had lived there prior to the sale rented it from this guy? The agreement also states, ' The Title shall commence with land certificate under which the vendor is registered with an absolute title'. It was a freehold property. Does that shed light on the circumstances?
jane
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Beneficial ownership is used in investments when the real purchase doesn't want - for various reasons - his / her name on the ownership documents.
You need to have complete trust in the person / corporation in whose name the property is registered.
See Jane's last sentence in italics.
Dawn M
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Thanks Dawn but I'm still confused :-\
Jane
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In sharebroking, it's called having your shares 'nomineed'
This was / is sometimes done by elderly people who don't want to have the hassles of looking after their own paperwork. But like I said, you'd have to have complete trust that the nominee company / person didn't sell your stuff without your authority!
It's a bit like the same principle of power of attorney.
Dawn M
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Hi Jane
Usually the legal and beneficial interests in a property vest in the same person - they are fused.
However, sometimes the proprietary interests are separated.
So: if A holds property on trust for B, the legal interest vests in A; but B (as beneficiary under the trust) has a proprietary interest recognised in equity as a beneficial interest.
Accordingly you could not simply look to documents of legal title (title deeds, land registration etc) in order to ascertain the full picture of the proprietary interests in real property. Sometimes therefore there would be need to look at evidence of beneficial ownership and/or to seek a declaration thereof.
On to your document:
Sometimes a transfer of equity takes place between two or more co-owners.
However, in your case it sounds more as though there was an arm's-length conveyance. In that case the vendor may have been making a declaration of beneficial ownership in order to make clear that the conveyance was of the whole legal and equitable title. In order to transfer legal title, the vendor would have had to hold legal title himself.
It's not quite clear, from what you say, what the document was purporting to transfer. :) Also whether the land was registered or unregistered land following changes to the law brought about by the 1925 legislation.
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Thanks Dawn & avm228. I think I'm getting a headache :D
The occupant prior to this sale in 1931 was an elderly widow & her two spinster daughters. The property in question is a Freehold premises. What I have in my hands is an Agreement for Sale & Purchase of Freehold Premises known as ........... (the address) drawn up by the solicitors of the vendor. It also includes a plan but no mention as to whether the land was registered or unregistered.
Perhaps the elderly widow just wanted the estate agent to deal with everything?
Jane
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the land registry was set up in1925, but properties were only registered when they came up for sale mine was only registerd in 1999, came with a full set of deeds back to when the earl of xxxx trustees transfered it to his eldest son on the occasion of his marriage.
I interpret the phrase "the title shall commence........" as meaning the property would be regitered with the land registry in the vendors name, then immediately transferred to the purchaser
maybe because the property was not yet registered the term beneficial owner was used because they held it by deed rather than registerd title.
hope it makes sense
mike
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just another thought-- if the elderly lady had lost her deeds, a not uncommon occurence, especially if she inherited it from her parents, she would be the beneficial owner, this was the vendors solicitor saying that title would be obtained prior to the sale
mike
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Thanks Mike a bit clearer now. Not being in the UK I'm a
bit a lot ignorant of these matters.
Who is likely to hold further documents relating to the property & land ownership before development, the local authority and/or land registration office?
Jane
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The Land Registry has a very good online service whereby you can view records for a small fee.
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I'm not aware of any central body prior to the land registry but if you know the street and district a post on london and middx board might be worth a try
mike
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Thanks Mike & avm226. I've got quite a bit to work on but I can consider the land registry on my next UK visit,
Jane
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...
I interpret the phrase "the title shall commence........" as meaning the property would be regitered with the land registry in the vendors name, then immediately transferred to the purchaser
maybe because the property was not yet registered the term beneficial owner was used because they held it by deed rather than registerd title ...
Another possibility could be that the original Deeds had been lost, so there was no record of the legal ownership history . . . hence "the Title shall commence ..."
Presumably, if that were the case, the "Beneficial owner" would have had to satisfy the authorities (by sworn statements, witnesses, etc) that he had a good claim to the Title before he was able to sell the property.
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A possibility Mike,
Jane
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Under the Law of Property Act 1925, land holdings in England were classified into one of two legal estates, Freehold or Leasehold.
These were further categorised depending on the security of the holding.
In the case of Freehold there were (and still are) two interests, Absolute Freehold and Possessory Freehold.
Possessory Freehold is a limited holding backed only by evidence of uninterrupted occupation over a period of years (12) and can be contested.
On the other hand, Absolute Freehold is an undefeasible title but to claim this it is necessary to back it up with an unbroken chain of ownership throughout a period of years. In 1931 the period was 25 years and so if you had the relevant deeds covering that period you could sell as the beneficial owner of the Absolute Freehold.
These deeds (prior to land Registration) tended to be held by the Solicitors acting for the beneficial owner and might have gone back, in some cases several hundreds of years. However it was only necessary to show the documentation for the legally required period. So, even if you have documents to show the chain of title through various owners down to yourself , say for the last 100 years, you did not have to produce them, stating instead that tile should commence only at a certain date and supplying that documentary evidence.
By 1931 Land Registration was compulsory for all property transactions in London and so if your property fell within the geographical area at that time then it would have to have been registered on the sale. The Land Registry would have examined the deeds and if satisfied, superseded them with a certificate. The certificate would have a unique number (the Title Number) and contain a plan of the property/location and a written schedule (called the Register), which gave details of the property, the beneficial owner, the class of title and also any legal considerations (such as a right of way) affecting it.
You can apply to the Land Registry for a search of their Index Map, quoting the property address. This will reveal the title number and using this you can obtain a copy of the certificate.
I hope this helps.
Phil
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Thanks Phil, very concise. Yes, I might make an attempt with the land registry, could prove interesting!
jane