Practice Guide 14 – Charities

Updated: July 2012

Update

This edition of the guide replaces the March 2012 edition. Amendments have been made to reflect the coming into force of the Charities Act 2011, which repealed the Charities Act 1993.

Scope of this guide

This guide gives advice about applications to be sent to Land Registry to register transactions involving charities. It is aimed at conveyancers and legal advisers to charities and to those acquiring land from charities and you should interpret references to ‘you’ accordingly. Land Registry staff will also refer to it.

1 Abbreviations, definitions and terms used

In this guide:

‘conveyancer’ means an authorised person within the meaning of s.18, Legal Services Act 2007 who is entitled to provide the conveyancing services referred to in paragraphs 5(1)(a) and (b) of Schedule 2 to that Act, or a person carrying out those activities in the course of their duties as a public officer. It also includes an individual or body who employs or has among their managers such an authorised person who will undertake or supervise those conveyancing activities (r.217A, LRR 2003)

‘LRA 2002’ means the Land Registration Act 2002

‘LRR 2003’ means the Land Registration Rules 2003

‘LRAAO 2008’ means the Land Registration Act 2002 (Amendment) Order 2008

‘the UCEAs’ means the Universities and Colleges Estates Acts 1925 and 1964

'the 1992 Act' means the Charities Act 1992

'the 1993 Act' means the Charities Act 1993

‘the 2011 Act’ means the Charities Act 2011

‘the LPA’ means the Law of Property Act 1925

‘the TOLATA’ means the Trusts of Land and Appointment of Trustees Act 1996

‘the 2009 Order’ means the Charities Act 2006 (Changes in Exempt Charities) Order 2009

‘the 2010 Order’ means the Charities Act 2006 (Changes in Exempt Charities) Order 2010.

The 2011 Act defines:

• ‘charity’ as:

‘....an institution which—

(a) is established for charitable purposes only, and

(b) falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities.’ ¹

• ‘charitable purposes’ as:

‘....a purpose which—

(a) falls within subsection s.3(1), 2011 Act [which lists 13 descriptions of purposes], and

(b) is for the public benefit s.4, 2011 Act’

¹ S.1, 2011 Act. The definition also applies in the LRR 2003 – see r.217.

Companies registered in England and Wales under the Companies Acts are, therefore, subject to the 2011 Act if their purposes are exclusively charitable under English law.

• ‘Trusts’, in relation to a charity, means the provisions establishing it as a charity and regulating its purposes and administration, whether those provisions take effect by way of trust or not². For example, they include the memorandum and articles of a company charity.

• ‘Trust corporation’ means the Public Trustee (who is not allowed to accept trusts for charitable purposes), a corporation appointed by the court in any particular case to be a trustee and a corporation entitled by rules made under section 4(3) of the Public Trustee Act 1906 to act as custodian trustee³. The corporations so entitled are listed in rule 30 of the Public Trustee Rules 1912⁴.

• ‘The Charity Commission’ means the Charity Commission for England and Wales. The Charity Commission is a body corporate incorporated pursuant to s.13, 2011 Act.

² S.353(1), 2011 Act.

³ S.205(1)(xxix), Law of Property Act 1925; s.17(1)(xxx), Settled Land Act 1925. See also s.3, Law of Property (Amendment) Act 1926.

⁴ SR & O 1912/348 (as amended).

The 2011 Act defines ‘charity trustees’ as:

‘.... the persons having the general control and management of the administration of a charity.’⁵

⁵ S.177, 2011 Act. The definition also applies in the LRR 2003 – see r.217.

In the case of a charitable company the charity trustees will normally be the directors of the company. Many of the duties imposed by the 2011 Act in connection with land owned by or in trust for a charity fall on the charity trustees as so defined. This is the case whether or not the charity trustees are themselves the registered proprietors of the land.

2 Introduction

2.1 The requirements of the Charities Act 2011

In addition to the requirements of the LRA 2002 and the LRR 2003, you need to take into account the requirements of the 2011 Act when making applications to register dispositions in favour of or by charities.

The transitional and saving provisions of Schedule 8 to the 2011 Act (Schedule 8, part 1, paras. 1, 2, 3(1), 5, 8 and 15(2)) mean that rr.176-180, LRR 2003 are not impliedly revoked. On and after 14 March 2012, the prescribed statements and certificates should set out the corresponding relevant provisions of the 2011 Act, although Land Registry will continue to accept statements and certificates that refer to the provisions of the 1993 Act. For transactions dated on or after 14 March 2012, standard restrictions in Form E and Form F will, when entered in the register, refer to the corresponding provisions of the 2011 Act.

Most charities are subject to the jurisdiction of the Charity Commission. These are referred to in this guide as ‘non-exempt’ charities. This is to distinguish them from exempt charities – see section 2.2 Exempt charities and bodies to which the 2011 Act does not apply. The trustees of non-exempt charities are generally allowed to sell, mortgage or otherwise dispose of the charity’s land without an order of the court or of the Charity Commission if they follow the correct procedures. These procedures are not binding on exempt charities⁶, and do not apply to certain specific transactions⁷.

⁶ Ss.117(4)(a) and 124(10), 2011 Act.

⁷ Ss.117(3) and 124(9), 2011 Act.

All dispositions of an estate in favour of a charity must contain a statement as to whether the charity is exempt or non-exempt and, if the latter, as to the restrictions on dispositions imposed by the 2011 Act. These statements are described in section 4.2 Statements required in a disposition to a charity.

All dispositions by a charity must contain an appropriate statement, as described in section 6 Dispositions by charities. In the case of a non-exempt charity the disposition may also need to contain a certificate by the charity trustees as mentioned in section 6.2.3 The certificate required in the disposition.

The statements enable the registrar:

• when registering a non-exempt charity or its trustees as proprietors of land, to enter an appropriate restriction, and

• when registering a disposal by a non-exempt charity, to be satisfied that the restriction has been complied with.

A transfer of a registered or unregistered estate on or in consequence of the appointment of a new charity trustee is not a ‘disposition’ for the purposes of ss.117-121, 2011 Act. Therefore, none of the statements described in section 4.2 Statements required in a disposition to a charity and section 6 Dispositions by charities nor the certificate described in section 6.2.3 The certificate required in the disposition are required to be included in a deed that appoints, or by virtue of s.334, 2011 Act has the effect as if it appointed, a new trustee or is made in consequence of the appointment of a new charity trustee.

However, a transfer of an unregistered freehold estate or an existing leasehold estate with more than seven years to run, which is made on or in consequence of the appointment of a new charity trustee, will trigger compulsory first registration under s.4(1)(aa), LRA 2002⁸ and, in the case of a non-exempt charity, the application for first registration must be accompanied by an application to enter the appropriate restriction⁹. See section 5.6 First registration of a non-exempt charity.

⁸ As introduced by LRAAO 2008.

⁹ R.176(2)(a), LRR 2003.

The form of restriction is set out in section 5 Registration of charities as proprietors. Section 10 Old forms of register entries explains how the registrar will treat older forms of restrictions entered in the register prior to 13 October 2003 (the date of commencement of the LRA 2002).

2.2 Exempt charities and bodies to which the 2011 Act does not apply

Some charities, which are covered by the 2011 Act for some purposes, are largely exempted from the jurisdiction of the Charity Commission although they remain subject to that of the High Court. These are termed ‘exempt charities’. Some exempt charities are subject to the UCEAs. The 2009 Order removed exempt charity status from the colleges and halls in the universities of Cambridge and Durham and from the colleges in the University of Oxford.

The 2010 Order removed exempt charity status from universities and university colleges in Wales, higher education corporations in Wales, and the Board and Governors of the Museum of London.

An exempt charity is one of the following.

• A body set out in Schedule 3, 2011 Act.

• A charity which is an exempt charity by virtue of any other enactment.

The expression ‘charity’ in the 2011 Act does not generally apply to¹⁰:

• any ecclesiastical corporation in respect of the corporate property of the corporation, except a corporation aggregate having some purposes which are not ecclesiastical in respect of its corporate property held for those purposes

• any diocesan board of finance, or any subsidiary of such a board, in respect of the diocesan glebe land of the diocese

• any trust of consecrated land for the purposes for which it was consecrated.

¹⁰ S.10, 2011 Act.

You can find more information on Church of England land in section 9 Church of England property, although the guide does not attempt to cover all aspects of this subject.

With a few exceptions, the provisions of the 2011 Act apply only to charities established in England and Wales¹¹.

¹¹ S.356, 2011 Act.

3 Making applications

An application for first registration should be made by the charity or charity trustees in whose name(s) the estate is to be registered. If the estate is being registered in the name of a custodian trustee, the application may also be made by the charity provided the estate is its corporate property. In the case of unregistered estates that become subject to a first legal mortgage, the mortgagee is also able to apply for first registration.

Form FR1 must be used if the application is for first registration of a freehold estate or for first registration of a leasehold estate where the freehold is not registered.

For dispositions of registered estates, there is no restriction on who may apply for registration of the disposition. Applications must be made using form AP1, including grants of leases out of a registered estate.

When registering a charity the registrar is obliged by law to enter some restrictions. Other restrictions must be applied for using form RX1 as explained in the relevant sections of this guide.

Practice Guide 1 – First registrations and Practice Guide 19 – Notices, restrictions and the protection of third party interests in the register give further information on these subjects.

4 Dispositions in favour of charities

4.1 Form of the disposition

Transfers of registered land in favour of charities must be in one of the forms in Schedule 1, LRR 2003. Transfers of the whole of one or more titles should be made on form TR1, TR2, TR5 or AS1. The numbers of the corresponding forms for transfers of part are TP1, TP2, TR5 and AS3.

There is no prescribed form for leases.

4.2 Statements required in a disposition to a charity

Any conveyance, transfer or lease in favour of a charity is required, by s.122(8), 2011 Act, to contain a statement relating to that charity. Any other disposition that will result in an estate being held by, or in trust for, a charity is also required to contain a similar statement. If the disposition is required to be registered by virtue of s.27, LRA 2002 or triggers the requirement for first registration under s.4, LRA 2002 the statements must be in the form prescribed by r.179, LRR 2003¹².

¹² S.123, 2011 Act

The effect of Schedule 8, paragraph 3(1), to the Charities Act 2011, is that r.179 should be read as if the statements are:

Exempt charity:

‘The land transferred (or as the case may be) will, as a result of this transfer (or as the case may be), be held by (or in trust for) (charity), an exempt charity.’

Non-exempt charity:

‘The land transferred (or as the case may be) will, as a result of this transfer (or as the case may be), be held by (or in trust for) (charity), a non-exempt charity, and the restrictions on disposition imposed by section 117-121 of the Charities Act 2011 will apply to the land (subject to section 117(3) of that Act).’

Where an exempt charity holds land on trust for a non-exempt charity, the second statement is required as the restrictions on disposition imposed by s.117-121, 2011 Act apply.

The above statements are not required in a charge in favour of a charity, a disposition of an advowson or release of a charity rentcharge¹³.

¹³ S.122(9), 2011 Act.

4.3 A charity that is a company

If the disposition is in favour of a charity that is also a company registered in England and Wales under the Companies Acts, the application must state the company’s registered number.

4.4 Charity trustees incorporated under Part 12 of the 2011 Act (or Part VII of the 1993 Act)

Where the charity trustees are incorporated as a body corporate under Part 12 of the 2011 Act (or Part VII of the 1993 Act then any disposition in favour of the charity must describe the trustees as:

‘a body corporate under Part 12 of the Charities Act 2011¹⁴’ (or 'a body corporate under Part VII of the Charities Act 1993' if the charity was incorporated under that Act.

¹⁴ R.177, LRR 2003.

The application to register the disposition should be accompanied by a certified copy of the certificate of incorporation granted by the Charity Commission under s.251 of the 2011 Act or s.50, 1993 Act.

4.5 The Official Custodian

Where land is vested in the Official Custodian you must also lodge with the application either:

• a certified copy of an order of the court made under s.90(1), 2011 Act (or s.21(1), 1993 Act)

• a certified copy of an order of the Charity Commission made under ss.69(1)(c) or 76(3), 2011 Act (or ss.16 or 18, 1993Act)¹⁵.

¹⁵ R.178(1), LRR 2003.

The address of the Official Custodian will be entered as the address for service if the land is vested in them by virtue of an order under s.76(3), 2011 Act (or s.18, 1993 Act). Otherwise, you should supply the address of the charity trustees or, in the case of a charity that is a corporation, the address of the charity for entry in the register¹⁶.

¹⁶ R.178(3), LRR 2003.

4.6 Exempt charities – production of trust document

Where the disposition is in favour of an exempt charity, the document creating the charitable trust should be lodged¹⁷.

¹⁷ R.182(1), LRR 2003.

4.7 A non-exempt charity incorporated otherwise than under the Companies Acts or the 1993 or 2011 Act

In this case, you should lodge a copy of the charity’s charter, statute, rules, memorandum and articles or other document constituting the corporation. Alternatively a certificate may be given by the applicant’s conveyancer in Form 8 that there are no limitations on the charity’s power to hold or deal with land¹⁸.

¹⁸ R.183, LRR 2003.

4.8 Registered social landlords and unregistered housing associations that are charities

In most cases, the application must contain or be accompanied by an appropriate certificate¹⁹.

¹⁹ See r.183A, LRR 2003.

4.9 Applications for restrictions

In some circumstances, application should be made either in the disposition or on form RX1 for an appropriate restriction to be entered in the register. This is dealt with in section 5 Registration of charities as proprietors.

4.10 Other points to remember

• Unlike private trusts, there is no limit to the number of trustees who may hold an estate vested in them under a charitable trust²⁰.

• The addresses for service stated in the disposition in favour of the charity or in the application form will be entered in the register and will then be used for the service of any notices²¹. You should, therefore, take care to use an address, or addresses, where such notices will be received by the charity.

• If the transfer contains covenants or declarations by the transferee(s), or an application for a restriction, it should be executed by the transferee(s).

²⁰ See s.34(3), Trustee Act 1925.

²¹ Rr.197 and 198, LRR 2003.

5 Registration of charities as proprietors

5.1 Background

Registration of a proprietor vests the legal estate in that registered proprietor²². Generally, third parties acting in good faith may assume that a registered proprietor has full power to enter into any disposition authorised by the LRA 2002, unless the register contains a restriction or other entry to the contrary.

²² S.58, LRA 2002.

In the case of non-exempt charities, s.123(2) of the 2011 Act imposes an obligation on the registrar to enter a restriction that reflects the powers of the proprietor. We will be able to decide whether such a restriction is necessary from the statement made in the disposition. If the estate is vested in the Official Custodian, an additional restriction may be necessary.

For exempt charities, the registrar is not obliged to enter a restriction. If a restriction is required because of limitations on the powers of the charity, you should apply for an appropriate restriction to be entered in the register.

Further details about restrictions are given later in this section.

5.2 Entry of proprietors

If a charity is a corporation we will enter its name and address in the register in the normal way, with the company registration number if applicable.

Where charity trustees are individuals we will enter them as proprietors in the usual way, except that we will enter an appropriate description after the names and addresses of the proprietors. The following example shows this.

‘(date) Proprietor: Fred Lawson of 27 Cromwell Way, Kerwick, Hertland, AB1 2XY, Angela Beech of 13 Pym Road, Kerwick, Hertland, CD1 2XY, and Philomena Tomlin of 1 Hampden Green, Kerwick, Hertland, EF3 3XY, the trustees of the charity known as the Hertland Countryside Trust’.

Where the charity trustees have been incorporated under Part 12 of the 2011 Act (or Part VII of the 1993 Act) the registration will be completed as follows.

‘(date) Proprietor: The Trustees of the Hertland Countryside Trust of 101 Hereward Street, Fenbury, Hertland, GH3 4YX, incorporated under Part 12 of the Charities Act 2011 (or Part VII of the Charities Act 1993)’.

Charity trustees incorporated under the Charitable Trustees Incorporation Act 1872 are now treated as having been incorporated under Part 12 of the 2011 Act²³.

²³ S.17(2)(b), The Interpretation Act 1978.

Where the land has vested in or transferred to the Official Custodian by virtue of an order under s.69 or s.90 of the 2011 Act (or s.16 or s.21(1), 1993 Act), then the registration will be completed as follows.

‘(date) Proprietor: The Official Custodian for Charities on behalf of the Hertland Countryside Trust of 101 Hereward Street, Fenbury, Hertland, GH3 4YX’.

Similar entries will be made where a charity is registered as proprietor of a charge.

As mentioned in section 4.5 The Official Custodian, where the land is vested in the Official Custodian by virtue of an order under s.76 of the 2011 Act (or s.18, 1993 Act) the address for service entered in the register will be that of the Official Custodian.

5.3 Restrictions for non-exempt charities

The registrar is under an obligation to enter an appropriate restriction in the register when registering a disposition in favour of a non-exempt charity²⁴. The statement in the disposition, as mentioned in section 4.2 Statements required in a disposition to a charity, will show if the charity is non-exempt. The appropriate restriction is in Form E as set out in Schedule 4, LRR 2003²⁵. The effect of Schedule 8, paragraph 3(1) to the 2011 Act is that Form E should be read as:

‘No disposition by the proprietor of the registered estate to which section 117-121 or section 124 of the Charities Act 2011 applies is to be registered unless the instrument contains a certificate complying with section 122(3) or section 125(2) of that Act as appropriate.’

²⁴ S.123, 2011 Act.

²⁵ R.176, LRR 2003.

The term ‘disposition’ includes the grant and release of easements. The term ‘registered’ is also wide and includes not only the making of a ‘guaranteed’ entry in the register but also the cancellation of such an entry. It can even include the cancellation of an entry stating that a certain deed is expressed to grant an easement.

5.3.1 The Official Custodian for Charities (‘Official Custodian’)

In addition to the above restriction, when the Official Custodian is being registered as proprietor as a result of a vesting order made by the Charity Commission under s.76, 2011 Act (or s.18, 1993 Act) (see also section 4.5 The Official Custodian) a further restriction is required. An application, using form RX1, must be made for entry of this restriction which will be in Form F²⁶. The effect of Schedule 8, paragraph 3(1), to the 2011 Act, is that Form F should be read as:

‘No disposition executed by the trustees of [name of charity] in the name and on behalf of the proprietor shall be registered unless the transaction is authorised by an order of the court or of the Charity Commission, as required by section 91(4) of the Charities Act 2011.’

²⁶ R.178, LRR 2003.

A former version of this restriction referred to the Charity Commissioners rather than the Charity Commission.

5.4 Restrictions for exempt charities

When you make an application to register an exempt charity as proprietor, you must provide a copy of the document creating the charitable trust²⁷. If the trust document limits the power of the charity to deal with land, you should consider applying for a restriction to be entered in the register reflecting the limitations. The application should be made using form RX1.

²⁷ R.182(1), LRR 2003.

5.5 Restrictions where trustees are registered as proprietors

Under s.6, TOLATA trustees of charity land have all the powers of disposition of an absolute owner. These powers are, however, limited by the provisions of that Act insofar as they apply to such trustees.

5.5.1 Provisions regarding the payment of capital money

Under s.6(6), TOLATA the powers conferred by that section must not be exercised in contravention of any other enactment. S.27(2), LPA, as amended, provides that:

‘Notwithstanding anything to the contrary in the instrument (if any) creating a trust of land or any trust affecting the net proceeds of sale of the land if it is sold, the proceeds of sale or other capital money shall not be paid to or applied by the direction of fewer than two persons as trustees, except where the trustee is a trust corporation.’

When registering joint proprietors, whether or not one of them is a trust corporation, the registrar will enter a restriction in Form A to reflect this limitation as follows²⁸.

‘No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.’

²⁸ S.44(1), LRA 2002 and r.95(2)(a), LRR 2003.

In the case of a sole trustee or a custodian trustee, it is for you to apply for the restriction either in the transfer to the trustee or on form RX1²⁹. This will ensure compliance with s.27(2), LPA.

²⁹ R.94(2), LRR 2003.

5.5.2 Provisions regarding consents

Under s.8(2), TOLATA, if the disposition creating the trust requires a consent to be obtained, the powers conferred by s.6 may not be exercised without that consent. For an exempt charity an appropriate restriction should be applied for as indicated in section 5.4 Restrictions for exempt charities. In the case of a non-exempt charity, this point will be covered by the certificate to be provided under the terms of the Form E restriction, so no further restriction is required.

5.6 First registration of a non-exempt charity

When a non-exempt charity applies for first registration voluntarily under the provisions of s.3, LRA 2002 or following an event that triggers compulsory registration under s.4, in circumstances where that event is not a disposition for the purposes of the 2011 Act³⁰, there will not be a deed containing the statement referred to in section 5.4 Restrictions for exempt charities. In these circumstances, an application must be made, using form RX1, for the entry of a restriction in Form E³¹.

³⁰ Such as the transfer of a qualifying estate on or in consequence of the appointment of a new trustee which triggers compulsory first registration under s.4(1)(aa), LRA 2002.

³¹ R.176(2), LRR 2003.

5.7 Other restrictions

Where there are any other limitations on the powers of particular charities, you should consider applying on form RX1 for any appropriate restrictions to be entered in the register.

6 Dispositions by charities

6.1 Exempt charities

A disposition by an exempt charity of a registered estate or of an unregistered estate that must be registered is required to contain a statement about the land and the charity³². The statement to be included depends on whether or not the disposition is a mortgage.

³²Ss.122(1), 125(1), 2011 Act.

R.180(1)(a), LRR 2003 sets out the statement for dispositions other than mortgages, which is as follows.

‘The land transferred (or as the case may be) is held by [(proprietors) in trust for] (charity), an exempt charity.’

R.180(2)(a), LRR 2003 sets out the statement for mortgages by exempt charities and is as follows.

‘The land charged is held by (or in trust for) (charity), an exempt charity.’

If you lodge a disposition by an exempt charity that does not contain one of these alternatives, it will be returned to you to have the appropriate statement included.

6.2 Non-exempt charities

6.2.1 Background

Non-exempt charities need to go through certain procedural steps before disposing of land³³. This guide does not describe them in detail but they include, in most cases, taking advice from a qualified surveyor and, normally, advertising the proposed transaction. In the case of a charge to secure the repayment of a proposed loan or grant, the trustees must take advice on its necessity, its terms and the charity’s ability to repay on those terms and in the case of a charge to secure the discharge of any other proposed obligation whether it is reasonable for the charity trustees to undertake to discharge the obligation having regard to the charity’s purposes. When they have taken the prescribed steps then, provided that they have power under the trusts of the charity to make the disposal and the transaction is not in favour of a connected person (a term not confined to the trustees – see ss.117(2), 118 and 350-352, 2011 Act), the charity trustees or the charity can dispose of the land without an order of the Charity Commission or the court. In all other cases (subject to s.117(3), 2011 Act) such an order is required³⁴.

³³Ss.117-121, 124 and 125, 2011 Act.

³⁴ Which will be made by the Charity Commission, usually under s.105, 2011 Act.

Under the 2009 Order the colleges and halls in the universities of Cambridge and Durham and the colleges in the University of Oxford became non-exempt charities.

Under the 2010 Order universities and university colleges in Wales, higher education corporations in Wales, and the Board and Governors of the Museum of London became non-exempt charities.

As already explained in section 5.3 Restrictions for non-exempt charities, in the case of registered land the requirements of the 2011 Act are reflected by entering the appropriate restriction, in Form E, in the register. The restriction provides that no disposition by the proprietor of the land is to be registered without a certificate from the charity trustees if ss.117 or 124, 2011 Act applies. Before 14 March 2012 the restriction was entered in the register as:

‘No disposition by the proprietor of the registered estate to which section 36 or section 38 of the Charities Act 1993 applies is to be registered unless the instrument contains a certificate complying with section 37(2) or section 39(2) of that Act as appropriate.’

A restriction in this form should now be read as if it referred to the provisions of the 2011 Act.

Any provision contained in the trusts of a charity, or in any provision establishing or regulating a charity, that requires the consent of the Charity Commission or the Secretary of State (under the Education Acts 1944 or 1973) to any disposition has ceased to have effect³⁵.

³⁵ S.36,1992 Act.

Provided any disposition by a non-exempt charity contains the relevant statement and a certificate if necessary, as explained in the following sections, the requirements of the restriction in Form E will be met and the disposition can be registered.

6.2.2 The statements required in the disposition

When a disposition is made by a non-exempt charity the deed must contain a statement about the estate, the charity and the nature of the transaction. This is required by s.122(2), 2011 Act (for dispositions other than mortgages) and by s.125(1), 2011 Act (for mortgages). The statement to be included in any disposition or mortgage depends on whether or not the disposition is one falling within s.117(3)(a)-(d), 2011 Act or in the case of a mortgage whether it is one falling within s.124(9).

The categories of disposition covered by s.117(3)(a)-(d), 2011 Act are:

• any disposition for which general or special authority is expressly given by a statutory provision or a legally established scheme (s.117(3)(a))
• any disposition for which the authorisation or consent of the Secretary of State is required under the Universities and Colleges Estates Act 1925 (s.117(3)(b))
• any disposition of an estate in land which:

(i) is made to another charity otherwise than for the best price, and

(ii) is authorised to be made by the trusts of the disposing charity (s.117(3)(c))

• any disposition by way of lease to a beneficiary under the trusts of the charity which:

(i) is granted for less than the best rent that can reasonably be obtained, and

(ii) is intended to enable the demised premises to be occupied for the purposes of the charity (s.117(3)(d)).

Under s.124(9), 2011 Act there is no restriction on mortgages for which general or special authority is expressly given as mentioned in s.117(3)(a) or for which the authorisation or consent of the Secretary of State is required as mentioned in s.117(3)(b).

R.180, LRR 2003 sets out the various forms of statement to be included in dispositions of registered estates and in dispositions of unregistered estates that will require the estate to be registered, depending on whether or not the disposition is a mortgage, and whether or not it is subject to the restrictions imposed by ss.117-121 or 124, 2011 Act.

The effect of Schedule 8, paragraph 3(1), to the 2011 Act is that r.180, LRR 2003 should be read as if the statements to be included in the deed are as follows.

• For a disposition other than a mortgage, either:
  • 'The land transferred (or as the case may be) is held by [(proprietors) in trust for] (charity), a non-exempt charity, and this transfer (or as the case may be) is not one falling within paragraph (a), (b), (c) or (d) of section 117(3) of the Charities Act 2011, so that the restrictions on disposition imposed by sections 117-121 of that Act apply to the land'

or

• 'The land transferred (or as the case may be) is held by [(proprietors) in trust for] (charity), a non-exempt charity, but this transfer (or as the case may be) is one falling within paragraph (a), (b), (c) or (d) (as the case may be) of section 117(3) of the Charities Act 2011'.
• For a mortgage by a non-exempt charity, either:
  • 'The land charged is held by (or in trust for) (charity), a non-exempt charity, and this charge (or mortgage) is not one falling within section 124(9) of the Charities Act 2011, so that the restrictions imposed by section 124 of that Act apply’
  • 'The land charged is held by (or in trust for) (charity), a non-exempt charity, but this charge (or mortgage) is one falling within section 124(9) of the Charities Act 2011'.
• In addition, a mortgage by a non-exempt charity that results in an application for first registration³⁶ should also contain the following statement.
  • 'The restrictions on disposition imposed by sections 117-121 of the Charities Act 2011 also apply to the land (subject to section 117(3) of that Act)'.

³⁶ S.4(1)(g), LRA 2002.

6.2.3 The certificate required in the disposition

Where a non-exempt charity or the trustees of such a charity are registered as proprietors of an estate there should be an appropriate restriction in the register. This restriction will be in Form E, as explained in section 5.3 Restrictions for non-exempt charities, or in a form used before the LRA 2002 came into force (see section 10 Old forms of register entries). The effect of this restriction is to require that, in addition to the appropriate statement referred to in the previous section, the disposition must also contain a certificate where either:

• the restrictions on dispositions imposed by ss.117-121, 2011 Act apply

• if it is a charge, the restriction imposed by s.124, 2011 Act apply.

The certificate should normally follow the appropriate statement in the deed effecting the disposition. The LRA 2002 does not prescribe any particular wording but the certificate must meet the requirements of ss.122((3) or 125(2), 2011 Act. The form of the certificate depends on whether the charity trustees have power under the trusts of the charity to make the disposition or charge and have complied with the relevant provisions of the 2011 Act, or whether the disposition or charge has been sanctioned by an order of the Court or the Charity Commission.

For a disposition (not being a charge) made other than pursuant to an order of the Court or the Charity Commission the certificate should be on the following lines.

'(Description of charity trustees and capacity in which they certify) certify that they have power under its trusts to effect this disposition and that they have complied with the provisions of the said sections 117-121 so far as applicable to this disposition.'

For a charge made other than pursuant to an order of the Court or the Charity Commission the certificate required should be on the following lines.

‘(Description of charity trustees and capacity in which they certify) certify that they have power under its trusts to effect this charge and that they have obtained and considered such advice as is mentioned in section 124(2) of the said Act.’

If the charity does not have trusts in the ordinary sense, the words ‘under its trusts’ may be replaced by:

‘under the provisions establishing it as a charity and regulating its purposes and administration.’

Where the disposition has been sanctioned by an order of the Charity Commission or the Court, the certificate required should be on the following lines.

‘(Description of charity trustees and capacity in which they certify) certify that this disposition (or charge) has been sanctioned by an order of the Charity Commission (or the Court).’

Where a person acquires an interest in an estate for money or money’s worth under a disposition containing any of the certificates described above, it shall be conclusively presumed that the facts are as stated in the certificate³⁷.

³⁷ Ss.122(4) and 125(3), 2011 Act.

6.2.4 Who gives the certificate?

The certificate must be given by the charity trustees³⁸ so they will need to join in and execute the disposition or charge in order to give the certificate. S.177, 2011 Act defines ‘charity trustees’ as the persons having the general control and management of the administration of the charity. Where the charity is a trust, this will generally be the managing trustees, whether or not they are also the registered proprietors. Where the charity is a body corporate, for example a company limited by guarantee or a parochial church council, it will generally be the directors or members. Occasionally, some form of governing council may administer the charity.

³⁸ Ss.122(3) and 125(2), 2011 Act.

6.2.5 How should the charity trustees be described?

Where the charity is a trust, we suggest that the charity trustees (whether or not they are incorporated under Part 12 of the 2011 Act) be described in one of the following ways.

• ‘The transferors (or chargors as the case may be), the trustees of the charity’.

The following wording is appropriate where the charity trustees are not the registered proprietors.

• ‘The trustees of the charity _______’;

• ‘The members of the _______ of the charity, being the persons who have the general control and management of its administration _______’.

If the land is vested in holding trustees or a custodian trustee and the charity is administered by managing trustees or a governing council, it is generally convenient for two of them (or more, if desired) to be authorised to execute the deed on behalf of them all (see section 8 Execution of deeds). In this case there is no need to give the names of all the charity trustees, and the wording in the second or third examples above may be used. If there is no delegated authority all the trustees or members of the governing council should be named in the certificate and should execute the deed.

Where the charity is a company and the directors are giving the certificate, as they usually will, they may be described as:

• ‘The directors of the charity (or, if preferred, of the company), being the persons who have the general control and management of its administration _______.’

Where the charity is some other kind of corporate body and the members are giving the certificate, they may be described as:

• ‘The members of the charity (or use term by which charity is generally known, e.g. the society, the association, the board, the council, the fund), being the persons who have the general control and management of its administration.’

If the incorporated charity has a governing council, the above wording may be adapted, for example:

• ‘The members of the governing council of the association, being the persons who have the general control and management of its administration.’

In these cases it is usual for two (or more, if desired) of the directors or members to be authorised to execute the deed on behalf of them all (see section 8 Execution of deeds). There is no need to give the names of all the directors or members. If there is no delegated authority all the directors or members should be named in the certificate and should execute the deed.

6.2.6 Unregistered land

Where an unregistered estate is held by or in trust for a charity, the owners’ powers to dispose of it are restricted in much the same way as they would be if their title were registered. Therefore, when examining a title on first registration, we will apply the principles outlined above as if the appropriate restriction had applied to the charity disposing of the estate. We will be able to determine if a certificate is appropriate because the requirement that the disposition contains statements about the land, the charity and the nature of the disposition also applies to conveyances, mortgages and leases of unregistered land. We therefore recommend that any disposition, to which s.117-121 or 124, 2011 Act applies, of an unregistered estate by a non-exempt charity contains a certificate along the lines of one of those set out in this section when it is appropriate to the circumstances of the disposition.

6.2.7 When a certificate is not required

There will be some occasions when a certificate should not be included in a deed because the disposition is not subject to the restrictions on disposition imposed by s.117-121 or, if a charge, to s.124, 2011 Act. These are dispositions referred to in s.117(3) of that Act and charges to which the provisions of s.124 are disapplied by s.124(9) of that Act.

These types of dispositions will have one of the second of the alternative statements referred to in section 6.2.2 The statements required in the disposition, depending on whether or not the disposition is a charge. Also, a certificate should not be included in a deed that is not a disposition for the purposes of s.117-121, 2011 Act, such as a deed that appoints, or by virtue of s.334, 2011 Act has effect as if it appointed, a new trustee or is made in consequence of the appointment of land held by or in trust for a charity. See section 7.2 Change of trustee for further details of the procedure on the appointment of new charity trustees under s.334, 2011 Act.

6.3 Complying with restrictions

6.3.1 Form E

This restriction will be complied with if the disposition contains the relevant statement and, if needed, a certificate as mentioned in section 6.2 Non-exempt charities.

6.3.2 Form F

A restriction in Form F in Schedule 4, LRR 2003 will have been entered in the register when an order under s.76, 2011 Act (or s.18, 1993 Act) has been made and the Official Custodian has been registered as proprietor. If a disposition has been executed in the name of and on behalf of the Official Custodian by the charity (if it is a corporation) or the charity trustees (if it is not) then whichever version of the restriction appears in the register, an order of court or of the Charity Commission will be required to authorise the disposition³⁹. If this is the case, the disposition should include a certificate stating that it has been sanctioned by an order of the Charity Commission or of the court, as appropriate⁴⁰.

³⁹ S.91(4), 2011 Act.

⁴⁰ Ss.122(3)(a) and 125(2)(a), 2011 Act.

Before 14 March 2012 the restriction entered in the register referred to s.22(3), 1993 Act rather than s.91(4), 2011 Act. Such a restriction should now be read as if it referred to s.91(4).

The restriction does not apply to dispositions executed by the Official Custodian.

6.3.3 Form A

If this restriction has been entered in the register it will not, of course, affect a disposition by joint proprietors. However, if the proprietor is a sole trustee or a custodian trustee it will be necessary for a second trustee to be appointed for the purposes of any disposition under which capital money arises, unless the trustee is a trust corporation.

6.3.4 Other restrictions

Other restrictions will be satisfied by producing evidence that the disposition complies with the terms of the restriction. The evidence will take the form of a certificate if the restriction calls for one or a copy of the required consent or order should be lodged if appropriate. If no consent or order is required in the circumstances, the position should be explained in an accompanying letter.

6.4 Cancellation of restrictions

Where a charity’s powers are limited and there is a restriction in the register in Form E, Form F or one of the previous versions referred to in section 10 Old forms of register entries, then this will be cancelled automatically where an application is made to register a transfer of the title by the proprietor provided:

• the restriction has been complied with, and

• the other aspects of the application are in order.

There is no need for an application to be made to cancel the restriction.

If a charity is remaining as proprietor of a title following a disposition, such as a lease or a charge, any charity restriction will remain in the register.

There may be rare occasions when a charity wishes to cancel a restriction in the register when no disposition has been made. For example, it may be that the trusts of the charity change and the restriction in the register is no longer appropriate. In such cases an application should be made to cancel the restriction using form RX3, accompanied by the relevant evidence.

7 Keeping the register up to date

7.1 Introduction

Estates owned by charities tend to be held for a long time. During this ownership many events may occur that affect the charity’s powers, status and trustees. For example, there may be deaths, resignations or appointments of new trustees. The charity may be reclassified as an exempt charity, it may become incorporated, the estate may be vested in a trust corporation or the Charity Commission may intervene. If any of these changes occur the register must be updated to reflect the current position.

7.2 Change of trustee

Where a registered estate is owned by charity trustees, a change in the trustees will not automatically change the ownership of the registered title. The general law relating to the appointment and discharge of trustees⁴¹ applies also to charities. However, s.334, 2011 Act makes additional provisions relating to charity trustees. Under s.334(1), 2011 Act a charity may, provided its trusts permit it, appoint and discharge trustees by resolution of a meeting of the charity trustees, members or other persons. A memorandum signed at the meeting is sufficient evidence of the resolution(s). To be effective to transfer the legal estate the memorandum must:

• be executed as a deed

• be executed by the person presiding at the meeting or in some other manner directed by the meeting

• be witnessed by two persons present at the meeting, and

• relate to land to which s.40 of the Trustee Act 1925 extends⁴².

⁴¹ See in particular Part III of the Trustee Act 1925.

⁴² See s.40(4), Trustee Act 1925 for land to which s.40 does not extend.

In order for the registrar to alter the register so as to vest the land or charge in the current trustees the original memorandum, evidence of the death of any trustee currently shown in the register who has died, and a certificate by the solicitor acting for the charity that it has power to use the procedure set out in s.334, 2011 Act must be produced. Since the memorandum will not necessarily identify all the current trustees it will help us if you provide a complete list of their full names, certified as such by the secretary or solicitor to the trustees.

Appointment of a new trustee may be made by way of a transfer and, as such a transfer is not a sale, lease or other disposal by the charity, s.122(3), 2011 Act does not apply to it. The registrar will accept any transfer by way of appointment of a new trustee, provided it is so expressed, without any certificate under that sub-section.

Where an application is made to the registrar to effect a change of trustees of a non-exempt charity, whether under the provisions of r.161, LRR 2003⁴³ or to register an appointment made by way of transfer, there is a duty to apply for a restriction in Form E to be entered in the register. This is unless such a restriction has already been entered⁴⁴. The application for the restriction must be made either on form RX1 or in the transfer.

⁴³ R.161(3), LRR 2003 relates to vesting declarations. A memorandum executed as a deed under s.334(3), 2011 Act operates under s.40, Trustee Act 1925 as if the appointment or discharge were effected by the deed.

⁴⁴ R.176, LRR 2003.

7.3 Intervention by the Charity Commission

The Charity Commission has extensive powers by order to intervene in the administration of non-exempt charities⁴⁵. Broadly, the powers are exercisable to ensure the proper administration of charities and to protect charity property against misconduct or mismanagement. They include a power to appoint an interim manager who shall act as receiver and manager in respect of the property and affairs of a charity.

⁴⁵ Particularly under s.76, 2011 Act.

Where an interim manager is appointed the order may confer on them such powers and duties of the charity trustees as are specified in the order and provide for those powers to be exercised by them to the exclusion of the charity trustees. See section 8.6 Execution by interim managers on the execution of documents in such a case.

Where any application is made to the registrar pursuant to any such order you must produce a certified copy of the order.

The Charity Commission may, by order, appoint new trustees or vest land in the Official Custodian. If an order under s.76, 2011 Act vests an estate in the Official Custodian, an application must be made for entry of a restriction in Form F in the register⁴⁶ (see section 5.3.1 The Official Custodian for Charities). This will prevent the charity trustees from exercising their powers in the name of the Official Custodian without authorisation.

⁴⁶ R.178, LRR 2003.

7.4 Change of circumstances

There are some situations when no disposition has been made but when it is necessary for an application to be submitted to Land Registry to enter a restriction in the register. In the following circumstances you should make an application on form RX1 to enter a restriction in Form E.

• Where a registered estate is held by or in trust for an exempt charity and the charity becomes a non-exempt charity⁴⁷.

• Where a registered estate not previously so held becomes held in trust for a non-exempt charity as a result of a declaration of trust by the proprietor⁴⁸.

• Where a registered estate is held by or in trust for a corporation and the corporation becomes a non-exempt charity⁴⁹.

Where the charity by or in trust for which an estate is held becomes an exempt charity, the charity trustees must apply for the restriction to be cancelled⁵⁰. The application should be made using form RX3.

⁴⁷ S.123(5)(a), 2011 Act.

⁴⁸ S.123(5)(b), 2011 Act.

⁴⁹ R.176(3), LRR 2003.

⁵⁰ S.123(4), 2011 Act.

7.5 Incorporation under Part 12 of the 2011 Act (or Part VII of the 1993 Act)

Under Part 12 of the 2011 Act (formerly Part VII of the 1993 Act), charity trustees may apply to the Charity Commission to be incorporated. If the Charity Commission grants the application then it issues a certificate to that effect. Upon the granting of the certificate the trustees become a body corporate under the name specified in the certificate. The property of the charity vests in the body corporate, except for that held on behalf of the charity by the Official Custodian.

To keep the registers up to date, an application for amendment of the register should be made against all titles of which the charity trustees are the registered proprietors. The application should be described as ‘Application to amend the register on the incorporation of a charity’ and be accompanied by a certified copy of the certificate of incorporation. No fee is payable.

The registrar will complete the application by cancelling the existing proprietorship entry and entering the name of the body corporate as shown in the example given in section 5.2 Entry of proprietors.

7.6 Dissolution of a body corporate under Part 12 of the 2011 Act

Part 12 of the 2011 Act also gives the Charity Commission power by order to dissolve a body corporate incorporated, or treated as being incorporated⁵¹, under that part.

⁵¹ S.17(2)(b), the Interpretation Act 1978.

The order has the effect of vesting the land in the trustees of the charity where it has up to then been held by the body corporate or by any other person (apart from the Official Custodian) on trust for the charity. The order may also direct that particular land be vested in a specified person as trustee for, or nominee of, the charity or in such persons other than the charity trustees as the Charity Commission may specify.

7.7 Change of name of a charity

The Charity Commission has power to require a non-exempt charity to change its name⁵². Where that charity is a company incorporated under the Companies Acts the Registrar of Companies must issue a new certificate of incorporation for the company⁵³.

⁵² Ss.42, 43 and 44, 2011 Act.

⁵³ S.45, 2011 Act.

A charity can change its name by its own decision. Where the charity is a registered charity it must notify its change of name to the Charity Commission.

Whether or not the change of name was compulsory, you should make an application to change the name of the charity or the description of the trustees in the register. Any new certificate of incorporation must be lodged. There is currently no fee for this application.

7.8 Merger of charities

The 2006 Act contains provisions to facilitate the merger of charities. As an alternative to executing a number of transfers of registered estates, the transferring charity may execute a pre-merger vesting declaration under s.310, 2011 Act. The declaration must be made by deed for the purposes of the section by the charity trustees of the transferor, must be made in connection with a relevant charity merger, and must provide that all of the transferor’s property is to vest in the transferee on such date as is specified in the declaration⁵⁴.

⁵⁴ S.310(1), 2011 Act.

The declaration operates on the date specified in the declaration to vest the legal title to all of the transferor's property in the transferee, without the need for any further document transferring it. However the declaration is ineffective to vest registered land unless registered under the LRA 2002⁵⁵. The declaration is also ineffective to vest a registered charge or any land held by the transferor under a lease or agreement which contains any covenant (however described) against assignment of the transferor’s interest without the consent of some other person, unless that consent has been obtained before the specified date⁵⁶. Evidence of the consent should therefore be included with the application.

⁵⁵ S.310(4), 2011 Act.

⁵⁶ S.310(a) and (b), 2011 Act.

The declaration need not be in a form prescribed by the LRR 2003. It should however contain the statements prescribed by rr.179 and 180, LRR 2003. Where the transferor is a non-exempt charity the statement will usually refer to paragraph (c) of section 117(3) of the 2011 Act. In that case the disposition is not caught by the terms of a restriction in Form E in Schedule 4, LRR 2003 and need not include the certificate under s.122(3), 2011 Act. However an order of the Charity Commission will be required to effect the merger if the trusts of the charity do not authorise it. In that case the disposition will not be within s.117(3), 2011 Act so that it must contain the statement that the restrictions on disposition imposed by ss.117-121, 2011 Act apply and the certificate that it has been sanctioned by an order of the Charity Commission (see sections 6.2.2 The statements required in the disposition and 6.2.3 The certificate required in the disposition).

8 Execution of deeds

8.1 General

As explained in section 6.2.4 Who gives the certificate?, a disposition containing a certificate by the charity trustees must be executed by them as well as by the registered proprietor. If, however, the charity trustees are also the registered proprietors, a single execution by each of them is sufficient. Where any proprietor has died, or if a company or other body corporate has been dissolved, evidence to that effect must be provided with the application. Where appointments or discharges of trustees have not previously been reflected in the register an application to give effect to them must be made before, or at the same time as, any application for registration of a disposition by the trustees.

8.2 Execution by charity trustees

Charity trustees may delegate to no fewer than two of their number an authority to execute in the names and on behalf of the trustees any deed giving effect to a transaction to which the trustees are a party⁵⁷. The effect is that where land is registered in the names of charity trustees any two or more of them may be authorised to execute a transfer, charge or other disposition of the land on behalf of all the registered proprietors.

⁵⁷ S.333, 2011 Act.

It is considered that the charity trustees may also delegate the power to give the required certificates under the 2011 Act.

The following is a suggested form of wording.

This wording assumes that the authorised trustees will meet to execute the deed at the same time. If the authorised trustees will be executing the deed at different times, a separate execution clause in the following terms should be provided for each of them.

The registrar will not require any evidence of the delegation if:

• the transfer, charge or other disposition states that it has been executed in pursuance of s.333, 2011 Act, and

• the disposition is for money or money’s worth and there is no reason to doubt the good faith of the person in whose favour it is made.

In any other case, the registrar will require strict proof that the authority has been properly conferred and is still subsisting.

The procedure can also be used if the registered proprietor is the Official Custodian for Charities, but see section 8.4 Execution in the name of the Official Custodian for Charities for further information on this.

In the absence of a delegation under s.333, 2011 Act the deed must be executed by all the trustees using the form of execution appropriate to an individual as follows⁵⁸.

⁵⁸ See Schedule 9, LRR 2003.

8.3 Execution by incorporated trustees under Part 12 of the 2011 Act

Provision is made for execution of deeds by a body of trustees incorporated under Part 12 of the 2011 Act⁵⁹. It is considered that these provisions apply both to the execution of the deed as registered proprietor and, when the deed contains a certificate by the charity trustees, to the execution of that certificate.

⁵⁹ S.260, 2011 Act.

Where the body corporate has a common seal a disposition can be executed by the affixing of the common seal. The wording appropriate to a company⁶⁰ may be adapted for the purpose. The registrar will not question the attestation of the seal if it appears to have been affixed in the presence of appropriate officers of the charity.

⁶⁰ See Schedule 9, LRR 2003.

Where the incorporated trustees do not have a common seal or choose not to use it, the 2011 Act provides two other methods of execution. Provided that the disposition purports to be executed in either way it is deemed to have been duly executed in favour of a purchaser⁶¹. It appears that a deed does not, in such cases, have to be signed in the presence of a witness⁶². The alternatives are as follows.

⁶¹ S.260(5), 2011 Act. This presumption does not apply where the transaction under which either procedure is used is not in favour of a purchaser in good faith for valuable consideration. If it appears to the registrar that a transaction is in favour of a connected person, strict evidence of the execution will be required.

⁶² S.260(4), 2011 Act.

• It may be executed by a majority of the individual charity trustees and expressed to be executed by the body.

There is no prescribed form of words but it is suggested that the following would be sufficient.

 

• It may be executed in pursuance of an authority conferred on any two or more trustees to execute in the name and on behalf of the body corporate, under s.261(1), 2011 Act.

The authority:

• must be in writing or by resolution of a meeting of the trustees

• may be framed so as to permit any of the trustees to act or may be restricted to named trustees or in any other way, and

• subject to any such restriction, and until it is revoked, must, notwithstanding any change in the charity trustees, have effect as a continuing authority.

8.4 Execution in the name of the Official Custodian

Charity trustees have full power to execute any deed in relation to any transaction where the Official Custodian is the registered proprietor of any estate. The exception is where the estate has been vested in the Official Custodian under s.76, 2011 Act and a restriction in Form F is entered in the register – see section 5.3.1 The Official Custodian for Charities.

The Official Custodian will no longer execute deeds personally. All the charity trustees should execute the deed and the registrar will assume that they have done so unless there is any evidence to the contrary. Alternatively, it is open to charity trustees to use s.333, 2011 Act (see section 8.2 Execution by charity trustees). Likewise, where the charity trustees have been incorporated under Part 12 of the 2011 Act, the procedure available under ss.260 and 261, 2011 Act may be used, as described in section 8.3 Execution by incorporated trustees under Part 12 of the 2011 Act.

8.5 Execution by other bodies corporate

Where a charity is a body corporate (incorporated under the Companies Act or otherwise) it should execute using the wording appropriate to a company⁶³, adapted if necessary to the requirements of the general law and of its constitution if any. As to the execution of any certificate contained in the deed see section 8.1 General.

⁶³ See Schedule 9, LRR 2003.

8.6 Execution by interim managers appointed under s.76, 2011 Act

An interim manager appointed by the Charity Commission under s.76, 2011 Act can deal with land only to the extent permitted by the order of the Charity Commission by which they were appointed. A certified copy of that order must, therefore, be produced with any application to register a dealing by an interim manager.

9 Church of England property

9.1 Introduction

This section gives a summary of the circumstances under which land may be held for ecclesiastical purposes, but it does not attempt to cover in detail all aspects of transactions involving church property. It sets out the situations where the restrictions on dispositions contained in ss.117-121 and 122, 2011 Act and the restrictions on mortgaging contained in ss.124 and 125, 2011 Act apply to estates held by the Church of England.

9.2 Cathedrals, churches and churchyards, and parsonage houses

Land that is the corporate property of an ecclesiastical corporation⁶⁴, whether sole or aggregate, that is established for spiritual purposes⁶⁵ is not generally land held by a charity to which the 2011 Act applies⁶⁶. Therefore, the restrictions on dispositions and mortgaging contained in ss.117-121, 122, 124 and 125, 2011 Act do not normally apply to such land.

⁶⁴ This does not include a company incorporated under the Companies Acts.

⁶⁵ A parochial church council or diocesan board of finance is not established for spiritual purposes.

⁶⁶ S.10(2)(a), 2011 Act.

Land in this category includes land held by:

• the body corporate of a cathedral (formerly the dean and chapter of a cathedral or the cathedral chapter of a parish church cathedral) in respect of the corporate property of the cathedral, other than any property held for purposes which are not ecclesiastical

• the incumbent of a benefice in respect of the parsonage house and grounds and the church and churchyard vested in them

• the bishop of the diocese selling parsonage land during a vacancy in the benefice.

Therefore, when registering one of the above bodies as proprietor of an estate, a restriction in Form E will not be entered in the register. However, dispositions by the above bodies are subject to the requirements of ecclesiastical law and may require the consent of the Church Commissioners⁶⁷. In view of this, an application to register one of them as proprietor should be accompanied by an application, on form RX1, to enter a restriction in Form D or Form L (for a cathedral) in Schedule 4, LRR 2003.

⁶⁷Any disposition or dealing by a dean and chapter must usually be in accordance with the Cathedrals Measure 1963 or 1999 or some other measure or authority and will require the consent of the Church Commissioners. A disposition by an incumbent of a benefice will not now require the consent of the Church Commissioners unless it is to a connected person or where a surveyor’s report on the transaction has not been obtained or considered. The Church Commissioners are no longer required to use a seal but the sealing of any document by the Church Commissioners, or their separate consent (given on headed paper from the Pastoral Division), is conclusive evidence that the above requirements have been satisfied.

In addition, any application to register a transfer to the diocesan board of finance that has the effect of vesting an estate in an incumbent or other ecclesiastical corporation sole should be accompanied by the relevant certificate in Form 4, in accordance with r.174, LRR 2003.

You should note, however, that where the ex officio trustee of a charitable trust happens to be an ecclesiastical corporation (such as an incumbent, archdeacon or bishop), the trust property is not the corporate property of the corporation and will be subject to the 2011 Act.

9.3 Consecrated chapels, etc

The expression ‘charity’ in the 2011 Act does not apply to any trust of land for the purposes for which it has been consecrated⁶⁸. In other words, consecration does not bring land within the scope of the 2011 Act.

⁶⁸ S.10(2)(c), 2011 Act.

9.4 Glebe land

Glebe land is vested in the diocesan board of finance of the diocese in question. In dealing with glebe land (but not in any other capacity), the diocesan board of finance is not a charity to which the 2011 Act applies⁶⁹. Therefore, the restrictions on dispositions and mortgaging contained in ss.117-121, 122, 124 and 125, 2011 Act do not apply to such land⁷⁰.

⁶⁹ S.96(2)(b), 2011 Act.

⁷⁰ The Endowments and Glebe Measure 1976 as amended by the Church of England (Miscellaneous Provisions) Measure 2000 includes provisions relating to the disposition of glebe land.

9.5 Land vested in a diocesan board of finance (other than glebe land)

A diocesan board of finance is a limited company empowered to hold real and personal property for purposes connected with the Church of England. Apart from glebe land, ss.117-121, 122, 124 and 125, 2011 Act normally apply to all estates vested in a diocesan board of finance⁷¹ which is a non-exempt charity. Consequently, the appropriate statement should usually be included in any disposition in favour of a diocesan board of finance (see section 4.2 Statements required in a disposition to a charity). When such a statement is included a restriction in Form E will be entered in the register when a diocesan board of finance is registered as proprietor (see section 5.3 Restrictions for non-exempt charities).

⁷¹ This includes land vested in a diocesan authority or diocesan trust.

A diocesan board of finance may hold property in a number of capacities including:

• its own corporate property held in accordance with its memorandum and articles of association

• property held as trustee for all purposes on specific charitable trusts

• property held as custodian trustee under the terms of a particular trust deed or Charity Commission scheme

• property held as custodian trustee under s.6, Parochial Church Councils (Powers) Measure 1956⁷²

• property held under the Incumbents and Churchwardens (Trusts) Measure 1964

• property vested for disposal under schemes made under the Pastoral Measure 1983 or earlier legislation. In general, any disposition is likely to fall within s.117(3)(a), 2011 Act.

⁷²This, in effect, consolidated earlier legislation vesting land (other than a short lease) acquired by a parochial church council in the diocesan board of finance.

Where appropriate, an additional restriction to reflect the terms under which the land is held should be applied for using form RX1 (eg Form A, where the diocesan board holds the land as custodian trustee for a parochial church council).

On a disposition of a registered estate by a diocesan board of finance, the appropriate statement and, if necessary, a certificate must be included in the deed (see section 6.2 Non-exempt charities). The ‘charity trustees’, defined in s.177, 2011 Act as the persons having the general control and management of the administration of the charity, may be the members of the diocesan board of finance, or they may be other persons⁷³. In either case, the charity trustees should join in any disposition to give the appropriate certificate (see section 6.2.3 The certificate required in the disposition). Two or more of the trustees may generally be authorised to execute on their behalf (see section 8.2 Execution by charity trustees).

⁷³ For example, where land is held on behalf of a parochial church council, the trustees will be the members of the parochial church council on whose behalf the land is held

9.6 The Central Board of Finance of the Church of England

This was a private company (Co. regn. no. 00136413) limited by guarantee and a non-exempt charity. It was not a diocesan board of finance but was empowered to hold property for purposes connected with the Church of England. The company was dissolved in 2008.

As a non-exempt charity the appropriate statement, and where necessary the appropriate certificate, would have been required to be included in any disposition. A restriction in Form E would have been entered when the company was registered as proprietor of an estate.

9.7 Land vested in the Church of England Pensions Board

The board is a charity and ss.117-121, 122, 124 and 125, 2011 Act apply to land vested in it. Consequently, the appropriate statement, and where necessary the appropriate certificate, should be included in any disposition. A restriction in Form E will be entered when the board is registered as proprietor of an estate.

9.8 Land held by the Church Commissioners

The Church Commissioners and any institution that is administered by it are non-exempt charities⁷⁴. Consequently, the restrictions on dispositions and on mortgaging contained in ss.117-121 and 124, 2011 Act apply to dispositions on or after 1 June 2010. The appropriate statement and certificate (see section 4.2 Statements required in a disposition to a charity and section 6.2 Non-exempt charities) should be included in any disposition, whether in favour of or by the Church Commissioners or any institution administered by it⁷⁵.

⁷⁴ The Church Commissioners was formerly an exempt charity but became non-exempt on 1 June 2010 when section 11(7) of the Charities Act 2006 came into force pursuant to The Charities Act 2006 (Commencement No. 7, Transitional and Transitory Provisions and Savings) Order 2010.

⁷⁵ The statutory powers of the Church Commissioners are contained in s.6(3)(a), Church Commissioners Measure 1947.

With effect from 1 September 2010, the relevant diocesan board of finance, not the Church Commissioners, will be the acquiring body for land (pursuant to the Church of England (Miscellaneous Provisions) Measure 2010).

9.9 Educational land

Various bodies of the Church of England hold land on educational trusts. In general, the restrictions on dispositions and mortgaging contained in ss.117-121, 122, 124 and 125, 2011 Act apply to such land. Consequently, a restriction in Form E will be entered on the registration of land held on such trusts, and the appropriate statement and, where necessary, the appropriate certificate should be included in any disposition.

9.9.1 School sites held by incumbents and churchwardens

By virtue of s.7, School Sites Act 1841 and s.4, School Sites Act 1844, grants of land and buildings or any interest therein for the purposes of the education of poor persons could be made to the incumbent and churchwardens of the parish to be held by them and their successors in office. Where land is so held, it is automatically vested in the incumbent and churchwardens for the time being and is subject to the provisions of ss.117-121, 122, 124 and 125, 2011 Act. The incumbent and churchwardens will be registered without reference to the individual names of the persons holding these offices at the date of registration. Any disposition of land so held should contain a statement to the effect that the incumbent and churchwardens therein mentioned are the current holders of these offices.

9.9.2 Redundant church school sites

The Secretary of State for Children, Schools and Families is empowered to make schemes in respect of redundant church school sites⁷⁶. The schemes will usually appoint the diocesan board of finance or the diocesan board of education (if it is a body corporate) as trustee for all purposes and will vest the land in the board. Such land is subject to the provisions of ss.117-121, 122, 124 and 125, 2011 Act. The required statement in dispositions by the board should refer to s.117(3)(a), 2011 Act. Most schemes made under the Education Act 1944 and some of the earlier orders under the Education Act 1973 stipulated that the power of sale was to be subject to the approval of the Secretary of State or of the Charity Commissioners, but this requirement is expressly removed by s.36(2), 1992 Act⁷⁷.

⁷⁶ Schemes made under s.86, Education Act 1944 and, currently, orders under s.2, Education Act 1973 and s.554, Education Act 1996.

⁷⁷ This section remains in force and has not been consolidated in the 2011 Act.

10 Old forms of register entries

10.1 Restrictions for non-exempt charities

10.1.1 The Charities Acts 1992 and 1993

Before the commencement of the LRA 2002 on 13 October 2003, when registering a non-exempt charity as proprietor one of two alternative restrictions relating to the Land Registration Rules 1925 would have been entered in the register⁷⁸. The restrictions used were either Form 12 if the title was not a rentcharge or Form 12C if the title was a rentcharge. These were worded as follows.

• Form 12

‘Except under an order of the registrar no disposition or dealing by the proprietor of the land is to be registered unless the instrument giving effect to it contains a certificate complying with section 37(2) or, in the case of a charge, with section 39(2) of the Charities Act 1993.’

• Form 12C

‘Except under an order of the registrar no disposition or dealing by the proprietor of the rentcharge is to be registered unless (a) the instrument giving effect to it contains a certificate complying with section 37(2) or, in the case of a charge, with section 39(2) of the Charities Act 1993; or (b) the instrument is a transfer by way of release of a rentcharge under the provisions of section 40 of the Charities Act 1993; or (c) it is a redemption of a rentcharge under sections 8 to 10 of the Rentcharges Act 1977.’

⁷⁸ Rr.60 and 124, Land Registration Rules 1925 (as amended).

Any disposition by a non-exempt charity where one of these restrictions is in the register should be treated as if the restriction was in the new Form E. If the procedures in section 6.2 Non-exempt charities are followed then the requirements of the restriction will be met.

The 1993 Act commenced on 1 August 1993, so restrictions entered in the register before this date but after 1 January 1993 will refer to the relevant sections of the 1992 Act, which came into effect on 1 January 1993 but was consolidated into the 1993 Act.

These restrictions will be treated in the same way as those referred to above.

10.1.2 Other restrictions

Where non-exempt charities have been registered prior to 1 January 1993, there are a number of different restrictions that may have been entered in the register. The most common of these was entered if no excepting order or regulations applied. This was worded as follows.

‘No disposition or other dealing by the proprietor of the land is to be registered without the consent of the Charity Commissioners or an order of the registrar.’

Other restrictions relate to bodies or properties that have been excepted by order or regulation from the need for the consent of the Charity Commissioners in specified circumstances. They include:

• those that permit registration of transactions completed before a certain date (eg 31 December 2000)

• those that permit dispositions of land that has not been occupied for the purposes of the charity

• those that permit dispositions of land owned by various religious denominations or religious premises in general

• those that prevent the registration of any disposition that is not authorised by s.29, Settled Land Act 1925 or the trusts of the charity.

All these restrictions will now be treated as if they were in the new Form E and any deed giving effect to any disposition of the land must contain an appropriate statement and a certificate if necessary (see section 6.2 Non-exempt charities).

10.1.3 The Official Custodian

There may be instances where the Official Custodian is registered as proprietor and the following restriction is encountered.

‘Except under an order of the registrar no disposition or dealing with the land is to be registered or noted without the consent of the Charity Commissioners as required under the provisions of section [17(2A) of the Charities Act 1960][22(3) of the Charities Act 1993].’

This restriction will now be treated as if it were a restriction in Form F – see sections 5.3.1 The Official Custodian for Charities and 6.3.2 Form F.

10.2 Exempt charities not subject to the UCEAs

Where an exempt charity not subject to the UCEAs was registered as proprietor before 1 January 1993, there may not be any restriction in the register. However, where such a charity was registered between 1 January 1993 and 31 December 1996 there will generally be the following restriction in the register.

‘Except under an order of the registrar no disposition or dealing by the proprietor of the land is to be registered unless it is authorised by the trusts of the charity or by some Act or other authority.’

This restriction may now be disregarded if the proprietor is a British company or an industrial or provident society.

10.3 Exempt charities subject to the UCEAs

Various restrictions have been entered in the past against certain universities and colleges, that have in common a reference to the Universities and College Estates Act 1925. Any such restriction will be treated as if it were in the following form.

‘No disposition by the proprietor of the registered estate is to be registered unless it contains a statement either (a) that it is authorised by the Universities and College Estates Acts 1925 and 1964 or (b) that it is authorised by some other Act or authority specified in the statement’.

This does not, however, apply to Winchester and Eton colleges, which are subject to greater restrictions. (See also section 6.3.4 Other restrictions.)

10.4 Collective registration

Sometimes charity trustees will have been registered as proprietors collectively in the following style.

‘Proprietor: The trustees of the charity known as the Oxbridge Ancient Forest Trust.’

This practice is no longer followed and estates will be registered in the names of the trustees, unless they are incorporated under Part 12 of the 2011 Act. A purchaser who intends taking a disposition from an unincorporated body of charity trustees that has been entered in the register collectively should obtain evidence of the identity of the current trustees and the disposition should be executed in accordance with the provisions detailed in section 8 Execution of deeds. In such a case the registrar will accept a certificate by the solicitor or secretary of the charity as to the identity of the present trustees. Where the trustees will remain in the register, the registrar will cancel the existing proprietorship registration and substitute the names of the individual trustees or, if they are a body corporate, the name of the body corporate.

10.5 Incorporation of trustees

The provisions of the Charitable Trustees Incorporation Act 1872 (as amended by the 1992 Act) have been consolidated in Part 12 of the 2011 Act. By virtue of s.17(2)(b), Interpretation Act 1978, charities incorporated under the 1872 Act are now treated as being incorporated under Part 12 of the 2011 Act.

10.6 Incumbent registered as proprietor

Before the introduction of the LRA 2002, when the incumbent of a benefice was registered as proprietor an inhibition was entered in the register. Under the new Act it is no longer possible to enter an inhibition and a restriction in Form D is entered instead. If an inhibition is registered, on any disposition by the incumbent it should be treated as though it was a restriction in Form D. The inhibition was worded as follows.

‘INHIBITION: No disposition of the land shall be registered except on production of a certificate from the Church Commission in accordance with section 99 of the Land Registration Act 1925.’

11 Enquiries and comments

If you have a particular concern that is not covered by this guide, please contact Land Registry in advance of the transaction – see Contact details. If the transaction is particularly complex, it may be better if you make your enquiry in writing at the Land Registry office that will process your application.

If you have any comments or suggestions about our guides, please send them to:

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(DX 8888 Croydon 3)

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