The following Property practice note provides comprehensive and up to date legal information covering:
If a charity is proposing to:
mortgage property that it owns, or
acquire property with mortgage finance
there are a number of issues that the charity trustees must consider. There are also various additional steps that must be taken.
In this context, ‘charity trustees’ means the persons having the general control and management of the administration of a charity (and so, eg will include the directors of a charitable company or the officers of a charitable unincorporated association).
The charity must have power to borrow and to mortgage its property as security for that borrowing. Such a power may be expressly set out in the charity’s governing document. If there is no such express power, a sufficient power may arise:
under the Trusts of Land and Appointment of Trustees Act 1996, s 6(8), which gives trustees of land ‘all the powers of an absolute owner’ (this includes the power to borrow money and to secure repayment of it on the trust property)
under section 8 of the Trustee Act 2000 (TrA 2000) which gives trustees the power to acquire land and invests them with ‘all the powers of an absolute owner’
by implication, where the borrowing is for the purposes of the charity’s trade (see Re Badger, Mansell v Viscount Cobham  1 Ch 568)
See Practice Note: Charities—governing documents.
A charitable company which owns the charity’s
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