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  •  

Property Lawyers and Conveyancing Solicitors in Manchester at Ford Banks Irwin Solicitors for Charities

 
Please note: Not to be used or relied upon without legal advice. These notes are for illustrative purposes ONLY

. . . continued from page 4

Solicitors for Charities

Dispositions by charities:

Exempt Charities:
A disposition by an exempt charity of registered Property title deeds or   unregistered Property title deeds that must be registered is required to contain a statement about the Property and the charity.

The statement for dispositions other than mortgages, is as follows:
'The land transferred (or as the case may be) is held by [(proprietors) in trust for] (charity), an exempt charity'

The statements for mortgages by exempt charities is as follows:
'The land charged is held by (or in trust for)(charity), an exempt charity'

If the Conveyancing Solicitors and Property Lawyers lodge a disposition by an exempt charity that does not contain one of these alternatives, Land Registry will normally return it to the Conveyancing Solicitors and Property Lawyers.


Non-exempt charities:
Non-exempt charities need to go through certain procedural steps before disposing of Property.  These include taking advice from a qualified surveyor and normally advertising the proposed transaction.  In most cases of a charge or mortgage to secure the repayment of a proposed loan or grant, the trustees must take advice on its necessity, its terms and the charity's ability to repay on those terms and in the case of a charge or mortgage to secure the discharge of any other proposed obligation whether it is reasonable for the charity trustees to undertake to discharge the obligation having regard to the charity's purpose.  When they have taken the prescribed steps then, provided that they have power under the trusts of the charity to make the disposal and the transaction is not in favour of a connected person (a term not confined to the trustees - section 36(2) and schedule 5, Charities Act 1993) the charity trustees or the charity can dispose of the Property without an order of the Charity Commission or the Court.  In all other cases (subject to section 36(9) Charities Act 1993) such an order is required.

In the case of registered Property the requirements of the Charities Act 1993 are reflected by entering the appropriate restriction in the register. The restriction provides that no disposition by the proprietor of the Property is to be registered without a certificate from the charity trustees if ss 36 or 28 of the Charities Act 1993 applies.

Any provision contained in the trusts of a charity, or in any provision establishing or regulating a charity, that requires the consent of the Charity Commission or the Secretary of State (under the Education Act 1944 or 1973) to any disposition has ceased to have effect.  Provided any disposition by the Conveyancing Solicitors and Property Lawyers for a non-exempt charity contains the relevant statement and a certificate if necessary, the requirements of the restriction in Form E will be met and the disposition can be registered.


Statements required in the disposition:
When a disposition is made by a non-exempt charity the deed must contain a statement about the Property, the charity and the nature of the transaction.  This is required by section 37(1) of the Charity Act 1993 (for dispositions other than mortgages) and by section 39(1) of that Act (for mortgages).  The statement to be included in any disposition or mortgage depends on which provisions of section 36 or 38 apply to the disposition or mortgage.

Generally, non-exempt charities are subject to restrictions on dispositions under section 36 Charities Act 1993 and to restrictions on mortgaging under section 38 of the Act. However, dispositions falling under section 36(9)(a), (b) or (c) and mortgages referred to in section 38(5) as not being affected by section 38 are not subject to the restrictions imposed by section 36 or 38 of the Act. Such dispositions will not, therefore, be affected by a restrictions in Form E on the register and do not need the consent of the Charity Commission or the Court.

The categories of disposition covered by section 36(9)(a), (b) or (c) are:
- any disposition for which general or special authority is expressly given by a statutory provision or a legally established scheme (which must be lodged by the Conveyancing Solicitors and Property Lawyers with any application relying on it)
- any disposition of an estate in Land which:
(i) is made to another charity otherwise than for the best price;
(ii) is authorised to be made by the trusts of the disposing charity
- any disposition by way of Lease to a beneficiary under the trusts of the charity which:
(i) is granted for less than the best rent that can be obtained
(ii) is intended to enable the demised premises to be occupied for the purposes of the charity
(iii) is in accordance with the trusts of the charity.

Under section 38(5) Charities Act, there is no restriction on mortgagees for which general or special authority is expressly given by a statutory provision or a legally established scheme.

Land Registry Rules 2003 gives the alternative forms of statement to be included in dispositions of registered Property and in dispositions of unregistered Property that will require the Property to be registered. Therefore, the appropriate statement must be used depending on whether or not the disposition is a mortgage and whether the restrictions in sections 36 or 38 of the Charities Act 1993 apply. The statements to be included in the deed are as follows:

- For a disposition other than a mortgage, either:
(i) 'The Property transferred (or as the case may be) is held by [(proprietors) in trust for] (charity), a non-exempt charity, and this transfer (or as the case may be) is not one falling within paragraph (a), (b) or (c) of section 36(9) of the Charities Act 1993, so that the restrictions on disposition imposed by section 36 of that Act apply to the Property'
(ii) 'The Property transferred (or as the case may be) is held by [(proprietors) in trust for) (charity), a non-exempt charity, but this transfer (or as the case may be) is one falling within paragraph (a), (b) or (c) (as the case may be) of section 36(9) of the Charities Act 1993'

- For a mortgage by a non-exempt charity, either:
(i) 'The Property charged is held by (or in trust for) (charity), a non-exempt charity, and this charge (or mortgage) is not one falling within section 38(5) of the Charities Act 1993, so that the restrictions imposed by section 38 of that Act apply'
(ii)
'The Property charged is held by (or in trust for) (charity), a non-exempt charity, but this charge (or mortgage) is one falling within section 38(5) of the Charities Act 1993'

- In addition, a mortgage by a non-exempt charity that results in an application for first registration should also contain the following statement:
'The restrictions on disposition imposed by section 36 of the Charities Act 1993 also apply to the Property (subject to section 36(9) of that Act'

  
   

(All italics in this page are Crown Copyright and reproduced here for your information with permission from HM Land Registry)


. . . contined on page 6 (Property Lawyers and Conveyancing Solicitors in Manchester page 6)

  
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