What is a Credit Union search in the context of a conveyance?
Credit Unions bear many similarities to Friendly Societies which are often characterised as associations of ‘mutual aid.’ Initially formed on a voluntary basis, friendly societies’ primary purpose was to ‘…safeguard members from debts arising from illness, death, or old age.’
Over time some Victorian friendly societies evolved into insurance companies, trade unions, industrial and provident societies, and various groups fostering specific activities or interests.
Gradually, in their own way, credit unions would co-evolve within the spirit of the co-operative identity, i.e., the principles of ‘ ‘…self-help, self-responsibility, democracy, equality, equity and solidarity…’.
The Credit Union movement when it came to Ireland in the 1950’s had a motivating instinct to provide people with control over their finances to ultimately alleviate many of the prevailing societal ills around poverty.
It attempted to meet these aims by encouraging financial prudence among its members through (a) savings, (b) providing its members with credit at a fair and reasonable rate of interest, and (c) managing and overseeing members’ savings for their collective advantage.
When the Registry of Credit Unions (RCU) Division (Under Section 84 of the Credit Union Act 1997) was formed within the Central Bank, it also created a statutory position of Registrar of Credit Unions, and that role had responsibility for the ‘…registration, regulation and supervision of credit unions’.
It is against these registers that the Credit Union searches are conducted.
Why should the purchasing solicitor/conveyancer conduct a search against the Credit Union registers when investigating title in a property/right/interest purchase?
Not dissimilar to a company, a credit union (under the Credit Union Act 1997 (Revised) as at 26 April 2023) has the right to acquire (for the purpose of conducting its business on the land…but for no other purpose.) and dispose of (including by lease, sub-lease or lesser interest) property and/ or land.
Therefore, from the perspective of the purchaser buying property/ land from a Credit Union, it is crucial to verify through searching the continued existence of the entity and its ‘active ‘registered status.
Other states/ classifications can include insolvent, in-liquidation, in-receivership, under examinership, any of which may affect the powers of the officers and members of the credit unions to progress a sale should those powers become vested elsewhere, i.e., with the liquidator.
Additionally, along with any dissolution instruments issued by its members, the solicitor or conveyancer responsible for the purchase should investigate whether the society’s members have executed any transfers of engagements that could impact the property, rights, or interests being acquired*.
Essentially, the conveyancer is trying to establish who the assets for sale belong to and are they controlled by the corporate body, either through its trustees or members?
What will the Ellis & Ellis Credit Union search result show me?
Typically, a Credit Union Search result will first detail the ‘as at’ review date of the register itself. †
Next, the very act of inclusion of Credit Union (along with its registered number) on the register will confirm its current status as active or live. Lastly, having contacted directly the Registry of Credit Unions section of the Central Bank of Ireland a completed result will also include references to (a) Instruments of Transfers of Engagements, (b) Orders for Winding Up, and (c) if any Instruments of Dissolution have been submitted.
Ultimately, the credit union search reports from Ellis & Ellis are intended to aid conveyancing agents in forming their buying decisions.
* Note 1: Unlike the Companies Office Registers, the credit union register does not retain details of any mortgages, charges or debentures, regarding credit unions. This information might be gleaned by direct contact with the credit union or by raising the matter with the selling solicitor/ conveyancer to show or provide acceptable declarations that any no charges/ liens or burdens affect the sale property.
† Note 2: The register details can run up to 3-4 weeks or more behind the actual date. As such, given the lapse in time, it might be prudent for a purchaser to obtain a certificate from the secretary or other appropriate officers of the credit union that it has not entered or does not intend to petition for a winding up of the Credit union, nor has it entered into receivership/ examinership in the intervening period.
Searches for other legal entities recorded on registers held in the Central Bank of Ireland, such as Irish Collective Asset-management Vehicle (ICAV) are available upon request. See full list of registers searched in the Central Bank of Ireland here.
Employ the services of a reliable provider for legal searches.
Considering the substantial consequences outlined above, which result from either neglecting a search altogether or, worse, conducting an insufficient or inaccurate Credit Union register search, it is crucial for purchasing solicitors/conveyancers to rely on a reputable law search provider like Ellis & Ellis.
Through our combination of a prompt and user-friendly ordering platform at www.ellis.ie, more than 130 years of professional expertise, and a commitment to quality in the post-purchase experience, we offer clients an exceptional searching service.
For added peace of mind Ellis & Ellis provide Professional Indemnity Cover of €10 million.
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