Dealing with Charity Land

The Charity Commission (Commission) has recently issued a case report in relation to Former Lacewood School, which required the Commission’s involvement to give its consent to allow for the sale of the land and provide new objects (known as making a scheme).

Relevant Issues

The former site of Lacewood School in Bolton upon Dearne was created from two trust deeds dated 1879 and 1897. However, the site was not in use since 2007 as the school moved to a new building on a different site and the old school site was demolished for health and safety reasons.

Barnsley Metropolitan Borough Council (BMBC) as one of the trustees approached the Commission for advice about the old schools site. The Commission engaged with this request and found that the school site contained a war memorial commemorating Lacewood School pupils who had died in the First World War and in subsequent military action.

Local residents were concerned with a proposed sale of the site and the implications this would have on a future memorial. BMBC did not feel best placed to continue as a trustee as the charity no longer fulfilled its original purpose.

The Commission’s Involvement

Having considered the relevant issues, the Commission authorised a scheme, which gave the power to sell the site (allowing for the war memorial to be preserved) and the funds to be used to fund educational grants for young people in the area.

This was possible because the charity Friends of Bolton upon Dearne War Memorial was established with the purpose of preserving and maintaining the monument to educate the public. As such the war memorial and the land will be transferred to the new charity.

Whereas the sale of the proceeds of the school site are to be transferred to another charity (the South Yorkshire Community Foundation) to enable it to make educational grants for young people in Bolton upon Dearne.

Obligations of Trustees

A trustee of any charity has a range of obligations according to charity law. This includes the duty to ensure that the charity can carry out its purposes for the public benefit. In cases where a charity is funded by trust deed, the trustees are under a duty to ensure that steps are taken so that the trust deed is brought up to date when the original purpose is no longer able to be carried out.

The Commission points out that many charities already have the power to update their purposes, which is done usually by resolution subject to the Commission’s consent and giving the Commission appropriate notice. Where this is not possible as was the case with Lacewood School, the relevant charity is required to apply to the Commission for it to use its legal powers to update the trust by scheme.

In cases where a charity is disposing of land, there are additional duties that trustees need to fulfil including the overriding duty to act in the charity’s best interests which usually means getting the best price available. However, this may be complicated by other considerations as in this case the views of the local community about the war memorial, even though this did not in fact affect the price.

Another important consideration when disposing of land is to ensure that the relevant formalities are fulfilled by including in the transfer documents clauses which reflect the status of the charity to ensure that the transfer is properly effected. While this particular care related to a school, such issues can crop up in a number of circumstances including housing associations registered with the Charity Commission.

The Commission has produced relevant guidance on duties of trustees, changing a charity’s governing document and disposing of charity land, which trustees should carefully consider.

Forbes Solicitors regularly advises and acts for trustees in a range of matters from regulatory issues to disposing of charity land. If you have any questions relating to charity law and practice, please contact Daniel Milnes.

Nat Avdiu

About Nat Avdiu

Nat Avdiu is a Paralegal in the Contracts and Projects team at Forbes Solicitors. Nat provides updates for clients on a range of issues including: governance, data protection and freedom of information, procurement and charity law.
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