Avoiding Disputes - The Importance of Updating Registered Titles to Reflect the Names of the Current Trustees
In this article we discuss why it is important to update registered titles at the Land Registry to ensure that the title accurately reflects the names of the current trustees.
We will also consider the issues that can arise when the title is not updated.
Who Does This Affect?
This affects unincorporated charities where individual trustees hold land assets on trust for the charity.
If the charity is a corporation then the charity is able to hold land in the charity's name rather than the name of the trustees, so they will not need to update the registered title when the trustees change from time to time
How Is the Title Held?
The individual trustees are named as the registered proprietors on the Land Registry title. Therefore, they own the legal title to the property on trust for the charity. The individuals named are the registered proprietors, which means that they must sign any documents relating to the property, including leases and freehold sales.
What Do Trustees Need to Do?
Trustees must ensure that the Land Registry title is kept up-to-date so that it accurately reflects the current trustees as the registered proprietors. If a trustee retires or passes away, the title should be updated as soon as possible so that the individual is no longer named as a registered proprietor. Any new incoming trustee should be added so that the title is correct.
If the trusts of a charity permits it, a charity can appoint and discharge trustees by resolution of a meeting of charity trustees, members or other persons. A memorandum signed at the meeting will be sufficient evidence of the resolution. The memorandum must be executed as a deed by the person presiding the meeting or in a manner directed by the meeting, be witnessed by two people present at the meeting and relate to land which is covered by section 40 of the Trustee Act 1925.
How Do Trustees Update the Land Registry Register?
In order for the Land Registry to update the register to the current trustees they require proof of the change to legal title, which can be achieved through completing a transfer, in which case the previous and new trustees will all need to execute the transfer deed. This can cause practical difficulties if the ex-trustees cannot be easily located.
The transfer must be expressed to be for the purpose of changing trustees, so that it is clear that a certificate is not needed to comply with section 122(3) of the Charities Act 2011.
Charities can also rely on the automatic vesting provisions, under which the memorandum discussed above can be used as evidence. This would need to be accompanied by a certificate by the solicitor acting for the charity that it has the power to use the procedure set out in section 334 of the Charities Act 2011. It is also best practice to provide a list of all the current trustees which is certified by the secretary or solicitor to the trustees; this is to ensure all the current trustees are correctly identified.
Additionally, if a former trustee has died, evidence of their death will need to be provided to the Land Registry.
Once the relevant documents and evidence have been compiled, they need to be submitted to the Land Registry. This can be done using the digital registration system on their website. Details will need to be completed on the system and the relevant evidence attached. It can take some time for the Land Registry to process these applications so it is important that the title is updated regularly to avoid any dealings with the property being delayed by having to update the title at a later date.
What Happens When This Is Not Done?
When titles are not kept up-to-date it can cause practical issues when the charity wants to deal with the property. For example, if the title is the name of an ex-trustee who the charity is no longer in touch with, the charity could face significant practical difficulties (and potentially cost) in trying to locate the ex-trustee to get them to sign any documents relating to the property. As time passes from the trustee retiring it becomes more likely for issues to arise, especially if the trustees have changed more than once. Obtaining a copy of the death certificate or other proof of a former trustee dying also becomes more difficult over time.
Are There Other Instances When the Land Registry Title Should Be Updated?
Yes, there are other many instances when the title will need to be updated, including the following examples:
- if the charity becomes incorporated
- if the charity's property becomes vested in a trust corporation
- if it is reclassified as an exempt charity
Top Tips
Keep the title updated and be on top of any changes to the trustees that need to be updated at the Land Registry. If you are unsure if previous trustee changes have been updated with the Land Registry, it is worth checking the title to ensure it is in the correct names.