1. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 Property Issues for Trustees Jonathan Stallard October 2012

2. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 2 The role of the charity trustee “Trustees have and must accept ultimate responsibility for directing the affairs of the charity, and ensuring it is solvent, well run, and delivering the charitable outcomes for the benefit of the public for which it has been set up.” From 'The Essential Trustee, what you need to know' - The Charity Commission 2

3. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 3 Obligations on the trustee relating to land and buildings It depends! Firstly, whose name is the property in? –This has an impact on the liability of both the charity and the trustee Secondly, what you want to do. –This dictates the procedures that you must follow 3

4. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 4 In whose name is the property held? It depends! What type of charity it is: –Charitable company; or –Charitable trust; or –Unincorporated associations; or –Charitable incorporated organisation (not yet in existence) 4

5. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 5 Charitable company Limited by guarantee Property held in the charitable company’s name Liability of trustees limited to the extent of the guarantee amount (usually £1.00) 5

6. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 6 Unincorporated association Property held in the name of: –Some or all of the trustees; or –Vested in The Official Custodian for Charities. Liability of the trustees of charity no different in either case Liability not necessarily limited to the assets of the charity – be careful! 6

7. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 7 Types of property transactions Acquiring Disposing Charging the property to a 3 rd party 7

8. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 8 Acquiring property Is your charity allowed to own or let property? –Check governing document If yes, go ahead If unsure, maybe rely on ‘the statutory power’ If prohibited, apply to Charity Commission to amend governing document Will it help the charity deliver the charitable outcomes? 8

9. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 9 Disposing of property Generally an order from Charity Commission required unless: –Sale to independent 3 rd party and the charity: Takes professional advice from a surveyor to ensure that the charity is getting a fair deal Advertises the proposed disposition in the way the surveyor advises –The disposal is one that is authorised to go ahead without having to comply with the statutory requirements Transfer of property to another charity with similar objectives for less that the market value Lease of property to a beneficiary of the charity, e.g. alms-houses 9

10. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 10 www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 Charging the property to a 3 rd party Again, no mortgage can be entered into without an order from Charity Commission unless: –trustees take written advice from appropriately qualified person –the extent of the advice depends on the type of mortgage 10

11. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 11 www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 What does the advice need to include? To secure repayment of loan or grant –Necessary to pursue course of action –Terms of the loan are reasonable –Charity is able to repay the loan To secure the discharge of any other obligation –Is it reasonable to undertake to discharge the obligation 11

12. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 12 www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 Conclusions Many different issues and dealings that a charity can have with property As a trustee keep in mind: (a) the fact that everything you do should be done to ensure the charity “is solvent, well run, and delivering the charitable outcomes for the benefit of the public for which it has been set up”; and (b) their own potential liability 12

13. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 13 www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 Contact Jonathan Stallard 01622 698047 jonathanstallard@whitehead-monckton.co.uk 13