Hi
I am a new trustee of a charity, which is ‘unincorporated’ and we are buying some land on which to build. As I understand, an ‘unincorporated charity’ has no legal identity and therefore cannot hold title to land or property, nor can it, in its own name enter into contracts.
I have been informed that the contract to purchase the land has been drawn up between the vendor and the Management Committee of the charity. Our Management Committee is comprised of both trustees and co-opted members. As I understand the law, it is the charity trustees themselves who enter into the contract and are the eventual title holders to land and property. Is it valid for a contract to be drawn up in the manner that I have been informed, or should it be drawn up using the names of the individual trustees as the purchasers – albeit using the agreed funds of the charity.
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You DEFINATELY need to get legal advice from a firm that knows charity law. Don’t try and avoid this cost. It is too dangerous a minefield to enter without proper legal advice. Your trustees could be personally liable if anything goes wrong.
Hello,
Proceed with caution as above!
Firstly, I suggest you make sure that acquiring land and property fits in with your strategy and objectives as a charity. Do you have a property strategy?
Secondly, read CC33 The Charities Commission Guide to Aquiring Land, on thier website here http://www.charity-commission.gov.uk/publications/cc33.asp
Thirdly, get early legal advice on whether your constitution allows you to purchase property, and whether you and the Charity are asequately protected.
Finally, get professional property advice from a Chartered Surveyor. I know of one charity who purchased land only to find they couldn't get the right consents to use it as they had intended, they almost went bankrupt.
A few hundred pounds spent wisely now will make sure you make best use of your resources. I run C-space, look us up and I'll be happy to spend 15-20 minutes on the phone as an initial discussion without charge.