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What is bona vacantia?
Bona vacantia is Latin for ‘ownerless goods’.
When a company is dissolved, it ceases to exist. Bona vacantia is used with reference to any assets held by the company at the time of its dissolution, which by definition have become ‘ownerless’. Whatever the nature of these assets, they pass automatically to the Crown. We can assist you if the company that owns the freehold or superior lease of your property has been dissolved.
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Bona Vacantia property for sale
Bona Vacantia property is dealt with on behalf of the Crown by the Bona Vacantia Division (BVD) of the Government Legal Department. However, the Crown will not take on any company liabilities, such as being a landlord, as they consider that too onerous. So, if the company owned the freehold of a block of flats, the Crown will either sell the freehold (usually to an appropriate buyer such as the leaseholders) or disclaim it.
In the meantime, leaseholders may encounter problems as the landlord normally has a number of ongoing obligations under the lease, including insuring the building and carrying out maintenance.
Bona vacantia freehold purchase
The BVD may consider selling the freehold to leaseholders who want to buy it. The price for a bona vacantia freehold purchase depends on the value of the flats, the length of the leases and what the ground rent is, but there is a minimum price of £1,000. The BVD will aim to achieve market value for the freehold, and you may need to obtain a valuation.
The Crown aims to deal with sales of freehold within 12 months of being approached, before deciding whether to disclaim the property. It is important to remember that the Crown is not obliged to consider your request for a bona vacantia freehold purchase and may instead decide to disclaim the asset. It is therefore important for leaseholders wanting to join together for a bona vacantia freehold purchase to organise themselves carefully.
Leaseholders wishing to participate can do this either by setting up a management company with the leaseholders becoming members. or through a joint sale. Those leaseholders not wishing to participate will have to complete a form stating their position.
Procedure for purchase of bona vacantia freehold
The application to purchase the freehold must be made to the Bona Vacantia office with jurisdiction for the area where the registered office and the assets of the dissolved company are situated.
Please note that you will be liable for both your own legal fees and those of the Crown.
Bona vacantia disclaimer
If the BVD disclaims the freehold, the freehold title is extinguished and the property becomes part of the Crown Estate, which is different to the BVD. This process is known as ‘escheat’. The Crown Estate will not assume any liabilities over the land and, while it is not obliged to sell it, the usual policy is to dispose of it to a suitable buyer.
I need to extend my lease. Can the Crown extend it?
No. The BVD will not extend a lease when the freehold reversion has become bona vacantia.
Can a restored company recover bona vacantia property?
If a company is restored, it can recover bona vacantia assets, provided the property has not been disclaimed by the Crown. However, there may be penalties to pay. An application can only be made by a former director or member of the dissolved company, within 6 years of the company being dissolved.
Bona vacantia waiver letter
If you are applying for the administrative restoration of a dissolved company, the law says that you must obtain the Crown representative’s written consent. This consent is known as a bona vacantia waiver letter. Full details are available on the government website.