Freehold transfer % question

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  • Kerbec
    started a topic Freehold transfer % question

    Freehold transfer % question

    I own one of 3 apartments in a building. the freehold of the property is owned / shared by the 3 apartment owners. One owner is selling his apartment and I have been asked by his conveyancer to sign the TR1 form to update the list of the freeholders. I noticed the buyer will have 2 names (presumably husband and wife) and and the transferees on TR1 is like this:

    myself, 3rd apartment owner, buyer1 and buyer2

    does this mean if the transfer is executed successfully, there will then be 4 freeholders so my share of the freehold will drop from 1/3 to 1/4? section 10 (declaration of trust) of TR1 has been left blank. would it be wise / safer to declare a trust and mention the share % explicitly?

    any help will be appreciated.

  • Lawcruncher
    replied
    You're welcome.

    Leave a comment:


  • Kerbec
    replied
    Originally posted by Lawcruncher View Post
    When it comes to ownership of land by more than one person you have to distinguish two different things. One is the legal ownership and the other the equitable or beneficial ownership. In the case of registered land (and ignoring exceptions not relevant to this thread) the legal owners are the persons registered as proprietors at HM Land Registry. The beneficial owners are the persons who derive advantage from the property. As here, the legal owners and the beneficial owners can be the same persons, but that does not mean that the legal and beneficial interests merge - they still exist as distinct interests.

    If one of joint owners wishes to dispose of his interest to an outsider and the outsider is to take his place as a legal owner, two distinct things need to happen for the job to be done correctly. One is that the disposer assigns his beneficial interest to the outsider and the other is that the disposer and the other owners transfer the legal estate to the outsider and the other owners. So, if property is owned by A, B and C and A is selling or giving his one third interest to D then:

    (a) A assigns his one third interest to D and any consideration is expressed to be paid by D to A

    and

    (b) A, B and C transfer the legal estate to B, C and D and consideration does not come into it.

    The two distinct assurances can be dealt with by separate documents, but it is convenient to deal with them in one.

    The TR1 you posted achieved neither (a) nor (b). My suggestions assume that it will all be done in one document.

    Without the first part of "my" part 11 it is not clear from the face of the document what is happening. From your point of view it makes it clear that you are not disposing of your beneficial interest. "My" part 10 confirms what the beneficial ownerships are.

    The second part of "my" part 11 is not strictly necessary, but makes it clear that you and the other continuing freeholder are only joining in the document for the buyer to take the place of the seller as a legal owner and registered proprietor. On reflection, the wording might be better phrased:

    The transfer of the legal esate of the property is made for the purpose of giving effect to the appointment of new trustees.
    great stuff. I had to read it a few times to understand it. thanks v much and really appreciate it.

    Leave a comment:


  • Lawcruncher
    replied
    When it comes to ownership of land by more than one person you have to distinguish two different things. One is the legal ownership and the other the equitable or beneficial ownership. In the case of registered land (and ignoring exceptions not relevant to this thread) the legal owners are the persons registered as proprietors at HM Land Registry. The beneficial owners are the persons who derive advantage from the property. As here, the legal owners and the beneficial owners can be the same persons, but that does not mean that the legal and beneficial interests merge - they still exist as distinct interests.

    If one of joint owners wishes to dispose of his interest to an outsider and the outsider is to take his place as a legal owner, two distinct things need to happen for the job to be done correctly. One is that the disposer assigns his beneficial interest to the outsider and the other is that the disposer and the other owners transfer the legal estate to the outsider and the other owners. So, if property is owned by A, B and C and A is selling or giving his one third interest to D then:

    (a) A assigns his one third interest to D and any consideration is expressed to be paid by D to A

    and

    (b) A, B and C transfer the legal estate to B, C and D and consideration does not come into it.

    The two distinct assurances can be dealt with by separate documents, but it is convenient to deal with them in one.

    The TR1 you posted achieved neither (a) nor (b). My suggestions assume that it will all be done in one document.

    Without the first part of "my" part 11 it is not clear from the face of the document what is happening. From your point of view it makes it clear that you are not disposing of your beneficial interest. "My" part 10 confirms what the beneficial ownerships are.

    The second part of "my" part 11 is not strictly necessary, but makes it clear that you and the other continuing freeholder are only joining in the document for the buyer to take the place of the seller as a legal owner and registered proprietor. On reflection, the wording might be better phrased:

    The transfer of the legal esate of the property is made for the purpose of giving effect to the appointment of new trustees.

    Leave a comment:


  • Kerbec
    replied
    Originally posted by Lawcruncher View Post
    10. Mark the box "they are to hold the property on trust". If there is a trust deed regulating the freeholders' interests continue: "upon the trusts declared by a [xxx] dated [xxx] and made between [insert names of parties]. If there is no such deed continue: "upon trust for themselves as tenants-in-common in the following shares:

    (a) [insert name of continuing freeholder A] one third
    (b) [insert name of continuing freeholder B] one third
    (c) [insert name of buyers] one third [as joint tenants] or [tenants-in-common in equal shares or otherwise as required]

    11. Insert the following:

    {The seller] wiith full title guarantee assigns to [the buyers] all his equitable interest and all other his estate right and interest in the property to [the buyers].

    This transfer is made for the purpose of giving effect to the appointment of new trustees.
    thank you so much for the detailed explanation. My neighbour(seller)'s solicitor has come back and said they would add additional clauses to section 10. While I am waiting for the revised TR1, just want to understand if what you put down in section 11 is absolutely necessary or just better/more complete to be there? what will be the implications / downside if (11) is not there?

    Leave a comment:


  • Kerbec
    replied
    Gordon999,

    yeah I agree. when I received the TR1 form from the seller's conveyancer, I thought it looked a bit funny (suspect it was prepared by a junor staff). After watching a vid from the land registry regarding the TR1, I realised it might not have been correctly filled in so started making further enquiry.

    thanks for your suggestion. much appreciated

    Leave a comment:


  • Lawcruncher
    replied
    The transfer is way off.

    Each section should be completed as follows:

    1. The title number of the freehold property

    2. The description of the freehold property

    3. -

    4. The names of all the current freeholders i.e the registered proprietors

    5.The names of the persons who are to be the new freeholders i.e. the purchasers and the current freeholders other than the seller

    6.Addresses of new freeholders

    7. -

    8. If there is no consideration for the transfer of the seller's freehold interest to the buyer then the box "the transfer is not for money or anything that has a monetary value" should be marked with a cross. If there is a consideration then the box "insert other receipt as appropriate" should be marked with a cross and the following added: "[The seller] has received from [the buyers] the sum of [xxx] for all the interest of {the seller] in the property."

    9. Do not mark any box

    10. Mark the box "they are to hold the property on trust". If there is a trust deed regulating the freeholders' interests continue: "upon the trusts declared by a [xxx] dated [xxx] and made between [insert names of parties]. If there is no such deed continue: "upon trust for themselves as tenants-in-common in the following shares:

    (a) [insert name of continuing freeholder A] one third
    (b) [insert name of continuing freeholder B] one third
    (c) [insert name of buyers] one third [as joint tenants] or [tenants-in-common in equal shares or otherwise as required]

    11. Insert the following:

    {The seller] wiith full title guarantee assigns to [the buyers] all his equitable interest and all other his estate right and interest in the property to [the buyers].

    This transfer is made for the purpose of giving effect to the appointment of new trustees.

    Leave a comment:


  • Gordon999
    replied
    I believe there should separate LR title numbers for one " leasehold title for sale flat" and one "freehold title for the entire building"

    (a) The TR1 form for transfer of leasehold title shows name of " Transferor" ( seller) and "Transferee"(buyer 3A + 3B ) should be done by conveyancing solicitor .

    ( b ) The TR1 form for transfer of freehold title should show

    Item 1. Freehold title No..

    Item 3 "Transferor " is Name 1 , Name 2 , Name 3 and

    item 5 "Transferee" is Name 1, Name 2 , Name 3A , Name 3B.

    item 10 , tick 3rd box and add below share held by each paerson.

    Name 1 - 1/3rd share ( for flat 1)
    Name 2 - 1/3 rd share (for flat 2)
    Names 3A + 3B - 1/3rd share ( for flat 3 ) .

    Above is my suggestion only ( or leave out 3B ) or call Land Registry for advice .

    Leave a comment:


  • Kerbec
    replied
    thx. I will make this suggestion and see what they say.

    Leave a comment:


  • leaseholder64
    replied
    You could also suggest that only one of the buyers becomes party to the freehold.

    Leave a comment:


  • Kerbec
    replied
    yeah, I know that will make the most sense. at the same time, I am trying to be mr nice guy and not introduce new items to hold up the neighbours sale. I guess if it has to be done, it has to be done.

    Leave a comment:


  • leaseholder64
    replied
    I would suggest the third box in section 10 needs to be ticked, and the accompanying trust documents should show the desired proportions of beneficial ownership. If anything other than unanimous decisions are required, it should also provide details of voting rules.

    Leave a comment:


  • Kerbec
    replied
    Originally posted by Lawcruncher View Post
    I think I need to see the transfer. Can you post it blanking out personal details?
    I made one up based on the TR1 sent to me so anyone can see wo me worry abt forgetting to redact some detail. section 10 and 11 (declaration of trust and additional provisions) were left blank as in the original. any thoughts and advice would be appreciated.

    Dropbox is a free service that lets you bring your photos, docs, and videos anywhere and share them easily. Never email yourself a file again!

    Leave a comment:


  • Kerbec
    replied
    just pm'd you. It took me a while as the system complained about the file size.

    Leave a comment:


  • Lawcruncher
    replied
    It all depends on what the transfer says. Please see post 6.

    Leave a comment:

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