For charities, owning or occupying property can be a key asset. However, making a bad decision with property, or failing to fully understand your property portfolio, can have a negative impact on your operations and finances, as well as your reputation.
We set out our top ten tips when dealing with property to ensure you have a well-managed property portfolio.
- 1. Conduct a review of your deeds and documents
Don’t leave things to chance. Pull out your old records and make sure you either know where they are, or that you physically have any deeds and documents relating to land and buildings that the charity owns or occupies. To ensure that all property deeds and documents are in one, safe place, you may wish to consider storing these in a law firm’s archive for safekeeping.
- 2. Carry out a property health check
Are your current property arrangements up to scratch? Consider having a chat with a solicitor about what the charity currently does in terms of property and what the wording of any related documents actually mean. Being aware of any risks and pitfalls or opportunities for best practice can save a lot of cost and brain ache further down the line.
- 3. Register your properties
Your property deeds are particularly important if the charity’s property is unregistered (land or property must be registered for the first time if it’s unregistered when you take ownership of it). Registering the property voluntarily at HM Land Registry will make evidencing the charity’s ownership and dealings with the property much easier, as it makes it easier to change, sell or give your property away in the future. Read our handy blog on the importance of registering your land.
- 4. Review the ownership structure of your property
How does the charity own property, and who owns it? Trustees retire, die or move on. There are many options for how a charity can own property, ranging from the individual trustees of a traditional charitable trust, to charitable incorporated organisations to vesting property in the Official Custodian for Charities. Consider whether or not the ownership is up-to-date and whether or not the structure is right for the charity’s current aims and objectives.
- 5. Keep and maintain a database of your property portfolio
It’s essential that you keep a record of what property the charity owns and occupies, and any important dates relating to them (e.g. a rent increase in a lease) – even if this is just on a spreadsheet. Our team of property lawyers can assist you with this task by conducting a search at HM Land Registry to identify all the property owned by a person/organisation.
- 6. Check your governing documents
Don’t be hamstrung. Check that the charity’s powers in its governing documents are wide enough to allow the dealings in property that the charity might need to do. If they are no longer appropriate then it’s wise to update these documents to ensure they are fit-for-purpose.
- 7. Implement a decision-making policy
Get the trustees together and come up with a simple framework for how property decisions are made for the charity – including where to start, possible sub-committees for property, which advisors to get in contact with etc. It can make things a lot more straightforward when you are faced with the pressure of a property decision in the future.
- 8. Take advice on dealing with legacy donations
Sometimes a charity is left a property or land in someone’s will. It’s wise to take advice on how to deal with this type of legacy, as there are a number of options available – from selling to renting the property out to generating an income/capital receipt from the land for the benefit of the charity.
- 9. Keep up-to-date with current legislation
Be aware of property changes as part of the Charities Act 2022 which, at the time of writing, are due to come into force in June 2023. Importantly, ensure you’re fully up-to-speed with the rules around what professional advice the charity is required to take for property transactions because these are being tweaked to provide more flexibility. Make sure you know the implications of this and decide what level of professional advice is right for the charity.
- 10. Consider diversification
Don’t be afraid of the unknown. If the charity owns land, or has been left land in a legacy, take advice on the full range of potential options for the land. For example, the land may appeal to housebuilders and it could be a chance to generate a transformative receipt for the charity.
Frequently Asked Questions
What is the land register?
A land register is a public database that contains information about land and property ownership, rights, and interests within a specific jurisdiction. It helps establish ownership, prevent fraud, and facilitate land transactions.
How to register property with land registry?
To register a property with the land registry, gather the required documents, fill out the application form, pay the registration fees, submit the application along with the documents, and await verification and processing by the land registry office. Once approved, you will receive a registration certificate as proof of property registration. For more information visit our guide page here.
We’re here to help
Many members of our dedicated charity team are trustees of charities themselves, and therefore have first-hand experience of the challenges facing not-for-profit organisations today. Even if you’re able to action just one or two of the top tips mentioned above, this will strengthen the charity’s position and help to secure its future. We can guide you through the process, supporting you every step of the way.
As well as advising on your property portfolio, we can also support you with issues such as employment law, funding and corporate advice and intellectual property considerations, as well as providing advice on any contentious probate issues.
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Ben blends technical excellence, sheer discipline and a pragmatic approach to ensure that his clients achieve their goals.
He advises on sales, purchases, leases, developments, property finance and investments, and everything else in between. If it is unusual or complex, get Ben involved.
Ben’s specialism lies in insolvency-based property matters relating to companies, clubs, individuals, and charities.
His clients include companies, individuals, trustees, landowners, and insolvency practitioners.
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