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The Land Aspects of Academy Conversions for Church Schools

on Friday, 21 April 2017.

Voluntary aided and voluntary controlled schools (Church Schools) are schools run or supported by the applicable local Diocese.

Generally speaking, at a Church School, the land on which the main school buildings sit is owned by the Diocese. If there is a playing field, that land is often owned by the Local Authority. However, there is an exception to every rule and land ownership of a site as a whole will need to be reviewed on an academy conversion as soon as possible to establish whether the standard position applies.

On conversion, the Academy needs to formalise its occupation of the school site so that it can operate the School following conversion. In respect of the Diocese owned land at Church Schools, the land owned by the Diocese is made available to an Academy using a Church Supplemental Agreement (CSA). The CSA sets out the terms upon which the Academy may occupy the school site. It also acts to protect the religious designation of the Academy and aims to allow the land arrangements to continue 'as is' following conversion.

For any land owned by the Local Authority, this is usually made available to the Academy under a 125 year lease. The Department for Education (DfE) has a model lease which is used in Academy conversions.

The main difference between the CSA and a lease is that the Academy will not be granted an interest in the school site under the CSA which can be registered at the Land Registry. The CSA acts only to permit the occupation of the school site by the Academy, effectively under a licence. The Diocese retain the ownership and control of the school site. Conversely, a lease grants exclusive possession of the land to the Academy and therefore the Academy has an interest in this part of the site which can be registered at the Land Registry.

This difference in status impacts on the level of flexibility and control the Academy has over the school site when compared to occupation under a single lease. This is evidenced by a few key factors. Firstly, it is possible for the Diocese to terminate the CSA by giving 2 years' written notice to the Academy and the Secretary of State for Education (although they are unlikely to do so without consultation with the Academy). Secondly, the CSA does not expressly permit the Academy to carry out any alterations to the school site. Thirdly, the Academy is not expressly able to grant any leases to third parties. Any leases would need to be made between the proposed Tenant and the Diocese rather than with the Academy, although the Academy would usually be a party to the arrangements as the main occupier of the site.

Recently, we have been involved in discussions around the interplay between the CSA and the DfE's Risk Protection Arrangement (RPA). The DfE model CSA can be amended to require the Academy to insure the site but the CSA does not permit an Academy to opt into the RPA. We have found that the Diocese are normally agreeable to providing a side letter setting out the terms upon which the Academy may opt into the RPA. The side letter allows the Academy to use the RPA but the Diocese have the ability to give one years' notice to the Academy indicating that they may not use the RPA and instead should insure in the normal way. The model lease already includes provisions enabling Academies to opt into the RPA.

The CSA is a document which balances allowing the occupation for the Academy and protecting both the asset of the Diocese and the religious designation of the Academy. Academies should be aware that the terms of the CSA are no less important than any lease and its impact should be considered carefully. When occupying under a CSA, discussions should take place with the Diocese so that the Diocese are aware of any intention to opt into the RPA, to facilitate any underlettings, or undertake works at an early stage.

We have a team of property lawyers specialising in advising schools and academies on property issues arising out of conversion to academy status.

For further information on how we can help you please contact George Williams in our Academies team on 0117 314 5421.

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