Q&As

Does a parish council (not being an eligible council under the Localism Act 2011) have the power, when agreeing to transfer council property to a developer, to secure deferred consideration by a taking a legal charge over the property?

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Published on LexisPSL on 02/11/2020

The following Property Q&A provides comprehensive and up to date legal information covering:

  • Does a parish council (not being an eligible council under the Localism Act 2011) have the power, when agreeing to transfer council property to a developer, to secure deferred consideration by a taking a legal charge over the property?
  • Power to dispose of land
  • Power to invest and lend

We have assumed that the land in question is in England.

Local authorities in England and Wales are corporate bodies created by statute of the UK Parliament as single legal entities. A local authority may only do what Parliament states it can do in the statute under which it was established or under statutes and secondary legislation adding to its purpose, see Practice Note: Dealing with local authorities in a finance transaction—investigating capacity and authority when lending to a local authority.

A parish council has all the functions that are vested in it by section 14(1) of the Local Government Act 1972 (LGA 1972) or otherwise, see Commentary: Constitution and powers of parish councils: Halsbury’s Laws of England [47].

Power to dispose of land

Subject to the restrictions contained in LGA 1972, s 127(2)–(5), a parish council may dispose of land in any manner they wish (our emphasis). If the disposal is for less than the land is worth, the Secretary of State’s consent is needed, unless the disposal is by way of short tenancy, that is to say a term not exceeding seven years or the assignment of a term with no more than seven years still to run. The Secretary of State has given a general consent for the disposal of land at less than full value where:

  1. the local authority considers that the purpose for

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