FAQs - Updating Land Registry titles for Unincorporated Charities
We know that in the busy life of an unincorporated charity, keeping on top of the ownership of the land of the charity can be difficult. We help lots of charities unpick years (and in some cases, decades) of trustee appointment and retirements to ensure that the property registration is accurate and advise those charities looking to vest land in a corporate trustee or the Official Custodian for Charities. This article sets out some answers to frequently asked questions.
Who does this affect?
This affects unincorporated charities where individual trustees hold land on trust for the charity.
If the charity is registered with Companies House then the charity is able to hold land in the charity's company name rather than the name of the trustees so they will not need to update the registered title when the trustees change.
How is the title held?
Usually, two to four individual trustees are named as the registered proprietors on the Land Registry title. Therefore, they own the legal title to the property on trust for the charity. The individuals named are the registered proprietors; this means that they must sign any documents relating to the property, including leases and freehold sales.
What do trustees need to do?
Trustees must ensure that the Land Registry title is kept up-to-date so that it accurately reflects the current trustees as the registered proprietors. If a trustee retires or passes away, the title should be updated as soon as possible so that the individual is no longer named as a registered proprietor. Any new incoming trustee should be added so that the title is correct.
This is often overlooked and Trustees believe that when they retired they also ceased to own property. This does not happen automatically.
How do trustees update the LR register?
In order for the Land Registry to update the register to the current trustees, both the current named trustees and new trustees must enter into a transfer. This can cause practical difficulties if the ex-trustees cannot be easily located.
The transfer must be expressed to be for the purpose of changing trustees, so that it is clear that a certificate is not needed to comply with section 122(3) of the Charities Act 2011.
Charities can also rely on the automatic vesting provisions if the correct mechanism has been used on appointment and retirement. This would need to be accompanied by a certificate by the solicitor acting for the charity that it has the power to use the procedure set out in section 334 of the Charities Act 2011. It is also best practice to provide a list of all the current trustees which is certified by the secretary or solicitor to the trustee; this is to ensure all the current trustees are correctly identified.
Additionally, if a former trustee has died evidence of their death will need to be provided to the Land Registry. If all the trustees on a registered title have died, then a new formal deed of appointment will be needed in respect of the land ownership.
Once the relevant documents and evidence have been compiled, they need to be submitted to the Land Registry.
It can take some time for the Land Registry to process these applications so it is important that the title is updated regularly to avoid any dealings with the property being delayed by having to update the title at a later date.
What happens when this is not done?
When titles are not kept up-to-date it can cause practical issues when the charity wants to deal with the property. For example, if the title is the name of an ex-trustee who the charity is no longer in touch with, the charity could face significant practical difficulties (and potentially cost) in trying to locate the ex-trustee to get them to sign any documents relating the property. As time passes from the trustee retiring it becomes more likely for issues to arise, especially if the trustees have changed more than once. Obtaining a copy of the death certificate or other proof of a former trustee dying also becomes more difficult over time.
Are there other instances when the Land Registry title should be updated?
Yes, there are other many instances when the title will need to be updated. For example, if the charity becomes incorporated, if the charity's property becomes vested in a trust corporation or if it is reclassified as an exempt charity. In all of these cases, the title will need to be updated.
Top tips
Keep the title updated and be on top of any changes to the trustees that need to be updated at the Land Registry. If you are unsure if previous trustee changes have been updated with the Land Registry it is worth checking the title to ensure it is in the correct names.
For more information, please contact Sarah Outram in our Real Estate team.