Is it acceptable to only have one of the trustees listed for a bare trust as an owner with land registry or would this create a situation where the other trustee has no authority? or would this create any other problems?
Thank you in advance.
It is possible but not desirable for the legal interest in any trust asset of any trust to be vested in only one trustee of several. If there are more than 4 trustees and the asset is land then only four can be registered but there is greater safety in numbers. If one person is registered HMLR will not routinely ask whether they are a trustee and so make a Form A restriction mandatory. The risk is that this one registered person may be able to sell to and vest the property in a bona fide purchaser without notice and take a plane to Brazil with the sale proceeds. In breach of trust but good luck with recovery. A civil suit may be the least of his worries and of his lawyer.
The non-registered trustee who allows this may himself be in BOT, and not excused under s61 TA 1925 depending on the facts. His powers and liability as a trustee are undiminished but it is his joint duty to safeguard the trust property and that must include vesting of title to best effect according to the nature of the asset. That may be done by vesting title in a lawfully appointed third party agent under a suitable contract.The sole registered trustee may be in BOT merely by deliberately not registering his co-trustee(s) with a Form A and a loss ensues, subject to causation.
For practitioners of false economy, which includes any number of lay clients, it is no more expensive to register one trustee rather than all of them. It may be a modest nuisance to then have all trustees sign future documents but if sidelining other trustees is the true objective of a client he should rapidly become a former client; thus obviating any need to write a letter to one’s insurers at some later date when there occurs a poo-fan interface (or “Horlicks De Luxe” in the parlance of the denizens of Lincoln’s Inn when engaged in a consultation in El Vino’s).
Jack Harper