Mortgages by charity trustees
Mortgages by charity trustees

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

  • Mortgages by charity trustees
  • Identifying charity land
  • Different types of charity for the purpose of land transactions
  • Mortgages—the conveyancing formalities
  • What procedure must a non-exempt charity follow?
  • When is an order of the court or Charity Commission required?
  • Land registration requirements

Where land is held on a charitable trust, it can only be mortgaged in accordance with the provisions of Part 7 of the Charities Act 2011 (CA 2011). A failure to comply with the statutory requirements may mean that the transaction is void.

Identifying charity land

Charity land can be held by any person or group of persons. It is the nature of the purpose for which the land is held which determines whether or not it is charity land. In many instances, the land will be held by a registered charity. However, it is feasible that a company (whether limited by shares or guarantee, or incorporated under Royal Charter), a local authority, a body of trustees, an unincorporated association, a corporation sole (eg the bishop of a diocese) or a corporation aggregate (eg the master and fellows of a university) might be holding land on the terms of a charitable trust without necessarily even being aware that this is the case. See Practice Notes: Title to charity land, How unincorporated associations hold property and Charities—governing documents.

Different types of charity for the purpose of land transactions

It is necessary to distinguish between three types of charity to determine the steps that a particular charity needs to take in relation to a mortgage of its land:

  1. Exempt charities— any charity listed in CA 2011, Sch 3 is an

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