When was the last time you visited the plot? Did you talk to the company's accountant? Did you pull an extract from the land registry? I asked Pinchas, after he had finished complaining that he did not understand how this had happened to him, and how all his money had gone down the drain.
Pinchas bought a plot abroad in the early 2000s. At first he used to visit the country where he had bought once a year, and even tried to advance plans to rezone the land and designate it for a gas station with a convenience store and perhaps a small motel, since the plot was next to a main intercity road. At first he dealt himself with finding a farmer who would work the land, pay the taxes to the local authority and pay him rent. Later he asked a friend to take care of the plot in return for pocketing the rent that would be paid. As the years went by, he moved on to other matters, other opportunities that came across his desk, and abandoned the project. Abandoned it to the point of forgetting it.
About a month ago he remembered that he had a plot and asked us to obtain for him, through the local partner, an extract from the land registry and an extract for the company through which he had bought the plot. We were both surprised to discover that the company had been struck off due to inactivity, and the extract showed that a receiver had been appointed over the plot and that it had been transferred to state ownership. Further checks revealed that Pinchas had stopped paying the accountant, who in turn had stopped filing reports with the tax authorities. The company's address had not been updated in the companies registry, as required. In short, someone decided that the company was inactive. Add to this the fact that a debt had accumulated with the local authority, because the annual tax on ownership and holding of the land had not been paid for almost a decade.
In a Zoom call with the local partner, he described the situation to Pinchas in very simple language: “Think about it: if you had children that you did not look after and care for, what would happen? The state would take them from you and place them with a foster family or for adoption, right? That is how the state here treats plots that nobody looks after and cares for: it takes them and transfers them to its own custody.”
Pinchas is not the only one this is happening or has happened to. In recent years quite a few clients have come to us who found themselves in unpleasant situations with the authorities in various countries after failing to look after, on a regular basis, the properties they bought and the companies they set up in those countries. The cost of resolving the situation (and not every situation can be resolved) is usually far higher than what would have been invested in routine care.
When did you last check the company you set up abroad? The property you bought abroad?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית