Section 862 of the Companies Act 2006 (Charges existing on property acquired) provides as follows:
(1)This section applies where a company acquires property which is subject to a charge of a kind which would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Chapter.
(2)The company must deliver the prescribed particulars of the charge, together with a certified copy of the instrument (if any) by which the charge is created or evidenced, to the registrar for registration.
(3)Subsection (2) must be complied with before the end of the period allowed for registration.
(4)If default is made in complying with this section, an offence is committed by—
(a)the company, and
(b)every officer of it who is in default.
(5)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
How does this provision operate in the context of the Land Registry’s policy of “early completion” which may involve a company acquiring a registered title subject to the seller’s mortgagee’s registered charge? As we know that the charge is eventually to be redeemed, and is subject to a solicitor’s undertaking, does that mean that there is no commission of an offence? If there is a delay in discharging, at what point should regard be had to section 862? One suspects that no-one makes use of section 862 in the circumstances described above. Presumably, we should just ignore?
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