A great deal of land in England and Wales is owned by charities. For example, “looking after more than 350 historic buildings, over 1,141 kilometres (713 miles) of coastline and approximately 247,180 hectares of countryside” makes the National Trust the country’s second largest landowner.
However, many charities own land to perform their objectives or by way of investment. This land changes ownership infrequently and much land that is owned by small charities has not been registered with the Land Registry. This is because there is no legal requirement to register land unless a transaction has occurred since 2003, when the Land Registration Act 2002 came into force.
Emma Wells, property solicitor in the Ansons charity law team, recommends that trustees should consider registering their land voluntarily. “There are various benefits to the charity” she explains “not least because this will allow the trustees to show they are complying with their fiduciary duty to protect the assets of the charity.”
Adverse possession is a risk where a charity owns land, but does not occupy it continuously or even have the resources to monitor it frequently. They could be at risk of a third party claim where, for example, a neighbour might extend their garden unnoticed onto the charity’s land and could take ownership of this by way of a claim for adverse possession.
Property fraud can occur when a tenant of a charity’s property attempts to pass themselves off as the owner and sell the property. By keeping their address for service up to date at the Land Registry, charities can ensure the trustees receive all correspondence and notice of any claims made against the land.
Undeveloped land can also be targeted by fraudsters. By entering a restriction against the title to the charity’s land, the Land Registry will not be able to register a sale or mortgage of that land without a certificate signed by the charity’s solicitor confirming the application has indeed been made by the charity.
When a charity wishes to raise finance by selling some land, according to Emma “It is not unusual to discover problems because the land in question is not owned by the correct entity when they come to let or sell.”
The strategic review of a charity’s land portfolio can identify these issues in advance and can be a valuable consolidation exercise for trustees. It may also simplify the management of the portfolio. Reviewing a charity’s land as part of the voluntary registration procedure can also prevent problems occurring in the future.
Charity trustees change periodically, and this can be an administrative burden. If an unincorporated charity wishes to register its portfolio then they should consider vesting the assets in the Official Custodian of Charities to avoid having to change the title register every time a trustee retires or is appointed.
Ansons Solicitors are specialists in charity law and can assist in voluntary registration of a charity’s assets. If you would like further information, please contact Emma Wells on 01543 267999 or firstname.lastname@example.org.
Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.