Q&A: charities and property
In this article, Lesley Robinson from Bates Wells Braithwaite answers frequently asked questions on the subject of charity and property.
Are charities allowed to own property?
Of course, just like any other organisation, legal body or person. If the charity is incorporated, the charitable company will own the freehold, leasehold or tenancy in its own name subject to the terms of its memorandum and articles. If the charity is unincorporated, the property can be held in the names of up to four individual trustees who will hold the property on trust for the charity. The governing document of some charities may allow the property to be held by a custodian trustee on behalf of the trustees. Where a charity is the freeholder, it can deal with the land however it wants, without reference to any other landowner, subject to the terms of its governing document. Where a charity is the leaseholder or tenant of land or property, the terms of the lease mean the consent of the landlord will usually be needed before the charity can do anything in relation to that property.
What should trustees do when acquiring property?
Whether a charity is acquiring a freehold or leasehold interest, the trustees should ensure they are acting in accordance with the terms of the trust. Trustees also have a general duty of prudence to act reasonably, which may require the trustees to take appropriate professional advice. This will ensure that the terms offered are reasonable for the charity’s intended use and are not too onerous and that a proper and that affordable price is being paid. Trustees must also check whether they have a power to acquire and hold property under the charity’s governing document. If there is no express power, they can apply to the Charity Commission to amend the governing document…
Click on the link below to read the rest of the Bates Wells Braithwaite briefing.
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