Charities and construction projects

The following Property practice note provides comprehensive and up to date legal information covering:

  • Charities and construction projects
  • General issues on construction projects
  • Specific issues for charities
  • Personal liability
  • Capacity and duties
  • Public procurement issues
  • VAT
  • Construction industry scheme
  • Community Infrastructure Levy (CIL)
  • Charitable exemption
  • More...

Charities and construction projects

A charity may be involved in a construction project:

  1. to fulfil its charitable objectives (eg the construction of social housing)

  2. to provide office or other accommodation in support of its principal charitable purposes, or

  3. as an investment opportunity

General issues on construction projects

Anyone who is commissioning a construction project needs to understand the following general issues:

  1. the respective roles of the developer, professional advisers, contractors, sub-contractors and suppliers

  2. the need for collateral warranties from, or rights under the Contracts (Rights of Third Parties) Act 1999 in relation to, key members of the professional and construction teams

  3. the different procurement methods

  4. the range of standard form construction contracts and appointments, and the usual amendments to them

  5. the role of professional indemnity insurance, contractor’s all risks insurance and product liability insurance

  6. the provisions of:

    1. the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996) in relation to payments under construction contracts and the right to refer a dispute under a construction contract to adjudication

    2. the Construction (Design and Management) Regulations 2015, SI 2015/51 (CDM Regulations) in relation to the duties of ‘the client’

    3. the Income Tax (Construction Industry Scheme) Regulations 2005, SI 2005/2045

Specific issues for charities

Personal liability

Charity trustees may become personally liable in relation to any contract if:

  1. the charity is not incorporated, subject to a right to be indemnified out of the

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