This document discusses options for transferring a property from a local authority to a charitable community group. A freehold transfer would give the charity full ownership but it may not be able to fund such a purchase. A long lease could provide long-term use but the charity would need to consider funder requirements. A short-term lease may work for a newly established charity concerned about long-term funding, allowing flexibility while avoiding major repairs. The terms of any transfer document would specify details like price, permitted uses, repair obligations, and provisions for ending the agreement.
2. Questions
• What form should the transfer of the property
take?
• What are the terms of the transfer document to
be?
3. Questions
What form should the transfer take:
• Freehold transfer
• Long lease
• Short lease
• Licence to occupy
4. Freehold or long lease Case Study
• Local community wished to save on iconic
building
• A corporate charity was set up to do so
• The property was to be used as a community hub
with multiple uses
• Terrible state of disrepair
• Funding from grant providers
5. Freehold Transfer
• Charity would own property absolutely
• Local Authority would be giving up all rights to it
• What value could the Local Authority achieve for
the sale of the asset? - Valuation
• Can the charity raise the funds for such a capital
purchase?
6. Long Lease
• Long lease – 25 years plus
• Consider funders requirements on length of term
• Local Authority considerations
7. Terms of the Transfer Document
• Freehold
− Price
− Restrictions
− Overage or claw back
− Due diligence
− SDLT and Land Registry registration
− Charities Act 2011 statements
8. Terms of the Transfer Document
• Long Leases
− Premium or rent
− Rent review provisions
− Reinstatement
− Repairing obligations
− Forfeiture – ending the lease by the landlord
− Alienation – can I sell or underlet the property?
9. Short term lease case study
• A community based project is being undertaken
• Grant funding for 5 years has been confirmed,
but the project is planned to continue past that
date
• The Local authority is willing to agree that the
project is run from one of its buildings but the LA
is concerned about the long term sustainability
and funding for the project
10. • The Charity is newly established
• The Charity intends to use the whole of the
property but is concerned that it does not have
sufficient funding for any structural repairs that
may be required
Short term lease case study
11. • Some non structural improvement works will be
required to make the property suitable
• The Local Authority wants to recover a market
rent for the property and to ensure that only this
particular Charity use the Property during this
period
• LA have plans to redevelop within 10 years
Short term lease case study
12. What form should the transfer take –
short term leases
• Useful if the organisation is newly established or
concerns about longer term sustainability and
funding
• Can allow more flexibility
• Unlikely that major structural works will be
required to the property
13. Licence to Occupy
• Not an estate in land
• Simply permission to do something on the
landlords property
• A personal right
• No right to exclusive possession
• Lease or licence
• Flexible and inexpensive
14. Terms of the Transfer Document
• Short Leases
− Tenant’s improvements
− Schedule of condition
− Break clauses
− Security of tenure – contracting out
15. Terms of the Transfer Document
• Licences to occupy
• Terminable by either party on a fixed date and on
short notice
• Offer alternative accommodation
