Legality of a Guarantor Deed issued by Dormant Company

[LindyLou7]

Hi, new member!

Could you advise me please on the legality of Deed of Guarantee issued by a company which is Dormant, but is a Landlord and collected rent for over three years. It still purports to be Dormant but no accounts filed. Also, can a Dormant Company issue a Section 21/8 if it is, in fact, Dormant!

 

[Frank the Insurance guy]

If its been collecting rent for over 3 years it isn't dormant!

 

[LindyLou7]

If its been collecting rent for over 3 years it isn't dormant!

I know! They say the company is a part of an Offshore Company (BVI) and the rent is sent to them. No trace of the parent company on Companies House, no trace on the Internet except in the Panama Papers But for Landlord purposes, they are the named company! Any idea where I can get a legal link to this for proof of wrongdoing?

 

[Ozzy]

If you are paying the bill to the name of the UK registered company then irrespective of where the funds ultimately end up, if they are flowing through the UK company then the UK company is not dormant (and I imagine should also be paying tax).
This may be the sort of thing the fraud team at Companies House and HMRC may wish to have a look into.

 

[WaveJumper]

For clarification is it actually the dormant company who are collecting the rent (ie you are passing the money direct to them) or is there a managing agent collecting on their behalf this would be the usual scenario then they would pass it onto the offshore fund.

 

[LindyLou7]

For clarification is it actually the dormant company who are collecting the rent (ie you are passing the money direct to them) or is there a managing agent collecting on their behalf this would be the usual scenario then they would pass it onto the offshore fund.

The Dormant Company is on the Tenancy Agreement and the Deed. On all the paperwork. An Agent managed the property so we do not know where the money went to but there is no evidence anywhere of the BVI Company on Companies House or on the documents. As far as our paperwork goes, it is the Dormant Company who are the landlords. They say it is only a matter for HMRC and therefore not important.

 

[LindyLou7]

If you are paying the bill to the name of the UK registered company then irrespective of where the funds ultimately end up, if they are flowing through the UK company then the UK company is not dormant (and I imagine should also be paying tax).
This may be the sort of thing the fraud team at Companies House and HMRC may wish to have a look into.

Thank you Ozzy, that's what we believe.

 

[WaveJumper]

A dormant company can hold an asset ie freehold property I assume they are looking to terminate your tenancy hence your original question and not knowing the details of your lease etc my best advice would be if you want to dispute this for whatever reason you are going to need proper legal advice from a commercial lawyer.

 

[LindyLou7]

A dormant company can hold an asset ie freehold property I assume they are looking to terminate your tenancy hence your original question and not knowing the details of your lease etc my best advice would be if you want to dispute this for whatever reason you are going to need proper legal advice from a commercial lawyer.

Yes but can a dormant company charge rent on the property for a number of years and not declare it? And issue legal documents in their name when Dormant? It is sadly going down the legal route.

 

[WaveJumper]

Without knowing the complete structure of the landlords set up it would be very hard to comment they obviously only using the dormant to hold an asset yes they could issue legal docs. Their tax set up to be honest at the end of the day is not your issue your issue is going to be dealing with the docs served on you, sadly your only route if your contesting this is the legal route.

 

[Gyumri]

"Deed of Guarantee issued by a company which is Dormant" - what is the company guaranteeing?
There seems no reason why a dormant company could not guarantee something, but that does not seem to be the issue: it is that it is also the lessor "for landlord purposes" with some right to lease the premises on behalf of the principal, which is the BVI company. Unless you mean it is simply the agewnt company collecting rent on behalf of the lessor which is the BVI company.

So its not clear what is the problem is. Your obligation is to pay rent in accordance with the terms of the lease.