When does property become “ownerless property”?
Property only becomes “ownerless property” in certain situations set out in legislation or the common law. However, the vast majority of ownerless property the Treasury deals with relates to companies that have been removed from the Companies Register.
Under the Companies Act 1993, in general, if a Company is removed from the Companies Register, any leftover property the Company had at the time of its removal vests in the Crown as “ownerless property”. The Companies Act 1933 and Companies Act 1955 (predecessors to the current Act) included similar provisions.
The situation might be different if the Company is liquidated but the liquidator “disclaims” some property under section 269 of the Companies Act 1993. Certain kinds of disclaimed property will not be “ownerless property”.
The information on this website relates mainly to ownerless property of former companies. There are, however, some other situations that may give rise to “ownerless property”. These include:
- Property subject to a failed trust
- Property of people dying without a will
- Property of unincorporated societies
If you have specific questions relating to any of the above, please contact the Treasury Legal Team at [emailprotected].
What types of property can become “ownerless property”?
A very wide range of property may be “ownerless property”. “Property” is not just physical property like land or money – it also includes intangible things that can be owned, like land rights (mortgages, easem*nts, etc.) or intellectual property. The most common types of property are listed below – please click on the link for more information about making an application regarding this type of property.
- Mortgages
- Easem*nts
- Liens
- Encumbrances
- Shares
- Bona VacantiaMoney
- Leases
- Trademarks and other intellectual property
- Land
- Resource consents
If you have queries about a type of property not listed above, please contact the Treasury Legal team at [emailprotected].
NOTE: Property held on trust for any other person is not “ownerless property”
The Companies Act 1993 states that property, which immediately before the removal of a company from the Companies Register had not been distributed or disclaimed, vests in the Crown with effect from the removal of the company from the Companies Register. However, the Companies Act 1993 also states that for the purposes of section 324 of the Companies Act 1993, “property of the former company” does not include property held by the former company on trust for any other person.
Accordingly, before accepting that the property of a former company has vested in the Crown, The Treasury requires evidence that the property is not, in fact, held on trust for another person.
I have found some abandoned property (or property that nobody has claimed). Is it “ownerless property”?
No. To qualify as “ownerless property”, the property must have no owner, and must vest in the Crown by default under the law. There is an established body of law (including common law and statutes) that sets out the circ*mstances that might lead to property becoming “ownerless property”(see When does property become “ownerless property”?).
Property is not “ownerless” just because the owner is unknown, cannot be located, or has abandoned the property. In those cases, it is more likely to be “unclaimed” property (see I have a question about abandoned/unclaimed property – where should I go?).
I have a question about abandoned/unclaimed property – where should I go?
“Unclaimed” property is different to “ownerless” property (see If property is abandoned, or nobody has claimed it, does that mean it is “ownerless property”?). Property is unclaimed if the owner is unknown, cannot be located or has abandoned the property.
The Public Trust is usually responsible for managing unclaimed property. However, if the unclaimed property is money, the responsible entity depends on the source of the money (for example, the IRD also has an unclaimed money department). For more information on unclaimed money.
If you have a question or enquiry about unclaimed property generally, you should contact the Public Trust on 0800 371 471 or email [emailprotected].
What are the Crown’s rights and responsibilities in relation to “ownerless property”?
Under section 75 of the Public Finance Act 1989, the Minister of Finance has the power to deal with all “ownerless property”, including the sale or transfer of that property, on behalf of the Crown. This power has been delegated to the Secretary to the Treasury.
The Crown does not keep a register of all “ownerless property” that it becomes the owner of. This is because the Crown becomes the owner automatically under the law – the Crown usually does not know it has become the owner until somebody tells the Treasury Legal Team that this has occurred.
Despite ownership of ownerless property vesting in the Crown by law, this does not mean the Crown automatically takes on the liabilities or obligations associated with the property. When property vests in the Crown as ownerless property and the Crown is made aware of that, the nature of the Crown’s ownership is passive. The Crown will not take any steps to assert positive ownership unless the Treasury is satisfied the property has vested in the Crown and there will be no claims made against the Crown as a result of asserting ownership.
A person can apply to The Treasury to request that it deal with some “ownerless property”. Before the Treasury can comply with the request, it must be satisfied that an “ownerless property” situation actually exists and that complying with the request will not lead to other parties having or bringing claims against the Crown. For more detail on the application process, see How do I make an application to the Crown about bona “ownerless property”? and/or view the Standard Requirements.
Once the Treasury is satisfied property has vested in the Crown, it has options about what action it can take in relation to that property.
Confirm the property has vested in the Crown and take steps to deal with it
When the Crown does become aware that it has become the owner of some “ownerless property”, it usually puts an advertisem*nt in the newspaper and publishes a notice in the Gazette. Otherwise, the Crown does not do anything to track down people who might also have an interest in the property.
The Crown will not keep the property if someone can show that something else should be done with it (e.g. someone else should own it). Once Treasury has given public notice that the property has vested in the Crown, Treasury is able to take steps to deal with the property. For example, Treasury is able to discharge “ownerless” mortgages or transfer “ownerless” trade marks to other people.
The steps the Crown will take to deal with the property depends on the particular type of property. For more information, see How to deal with property of a company removed from the Companies Register.
Disclaim the property
Where Treasury is made aware that ownerless property has vested in the Crown, Treasury can give up its interest in the property by disclaiming it. Disclaimer of property by the Crown is not common and usually only occurs where land of little or no value has vested in the Crown.
If the Treasury disclaims property, it is treated as never having passed to the Crown as “ownerless property”.
How do I make an application to the Crown about “ownerless property”?
The Treasury Legal Team manages applications relating to “ownerless property”.
Before processing any application, the Treasury Legal Team must be satisfied that the property has vested in the Crown and that there will be no claims against the Crown resulting from the discharge. To this end, before dealing with property as “ownerless property”, the Treasury generally requires:
- a statutory declaration from a former director of the company outlining why the property can be considered “ownerless property” and confirming that the property is not held on trust for another person (for more information, see When does property become “ownerless property?) If it is not possible for the statutory declaration to be made by a former director, the Treasury may accept a statutory declaration from someone else associated with the company or with knowledge of the matter;
- an indemnity in favour of the Crown, in respect of all or any liability that may be incurred by the Crown in dealing with “ownerless property”;
- copies of all relevant documentation; and
- an undertaking that all reasonable costs and fees incurred in processing the application, including advertising costs where required, will be paid (for more information, see How much does an application cost?).
The full list of application requirements depends on the type of property that is the subject of the application. For more information about applications in respect of a type of property, click on one of the links below:
- Mortgages
- Easem*nts
- Liens
- Encumbrances
- Shares
- Bona VacantiaMoney
- Leases
- Trademarks and other intellectual property
- Land
- Resource consents
Once you have gathered all the required information and prepared drafts of the necessary documents, email the Treasury Legal Team at [emailprotected]. We also recommend that applicants get legal advice and assistance with documents before proceeding with an application.
How long does the application process take?
While the Treasury Legal Team aims to process “ownerless property” applications as soon as practicable, the timeframe for processing depends on the type of application and the volume of applications currently being reviewed. In particular, when property vests in the Crown under section 324 the Companies Act 1993, the Treasury is required to advertise the vesting of that property for at least 20 working days (to give enough time for interested parties to respond to the advertisem*nts).
If your application is urgent, please indicate this in your application and state the reasons why your application should be accorded urgency.
How much does an application cost?
Please note that the fees in the table below are indicative. Our fees may be higher on complex applications. The Treasury reserves the right to change these fees at any time, and without providing public notice.
The Treasury’s fees for common applications | ||
|---|---|---|
Type of Action Required | Base Fee | Extra Advertising Costs |
Discharge of Mortgage/Easem*nt/Encumbrance | $400 (incl. GST) | Public notice in the Gazette (and in some cases in the paper circulating in the company’s place of business or registered office) |
Notices of Disclaimers and Vesting notices | $400 (incl. GST) | Public notice in theGazette (and in some cases in the paper circulating in the company’s place of business or registered office) |
Memorandum of Consents/No Objection Letters | $200 (incl. GST) | No advertising required |
Where property of a company that has been removed from the Companies Register vests in the Crown, there may be a requirement for the Crown to give public notice of vesting. If ownerless property has vested in the Crown under the Companies Act 1993, the Crown is required by law to publish a “notice of vesting” in the Gazette and an advertisem*nt in a newspaper circulating in the area in which the former company’s place of business or registered office was located once it becomes aware that “ownerless property” has vested in the Crown. This notification requirement does not apply to property of former companies that has vested in the Crown under the Companies Act 1955.
This is so any other parties who might have an interest in the property are made aware of the vesting. The Treasury is entitled to be reimbursed for these expenses by applicants under the Public Finance Act. For more information on indicative advertising costs, see the following webpages:
- Gazette fees: https://gazette.govt.nz/fees
- New Zealand Herald fees (indicative only, as at 2017): http://www.newsworksnz.co.nz/media/134895/nz-herald-modular-ratecard-agency-2017.pdf
Before undertaking any work to process applications to deal with ownerless property Treasury requires an undertaking from the applicant or their solicitor to pay Treasury’s fee and any advertising costs. Once Treasury has received the undertaking it will process the application and will send an invoice of fees at the conclusion of the matter.
I want legal advice about some property that may be “ownerless property” – who should I talk to?
While the Treasury Legal Team is able to provide you with information regarding “ownerless property” applications, it does not provide legal advice to members of the public. Nothing on the Treasury’s website should be construed as legal advice.
If you require legal advice, you should obtain independent advice from an experienced legal practitioner. Further information on obtaining legal advice can be found at http://www.lawsociety.org.nz/.
