Property Aspects of Academy Conversion
The property aspects of conversion to an academy can often prove more difficult than might be expected. There are a number of reasons for this.
Many schools do not have comprehensive records about the ownership of their site. It is often the case that the school property is not held in the right ownership, often because the property has not been correctly transferred on the previous occasion that the school has changed status.
The first task in the conversion process is therefore to investigate the title and establish the liabilities that apply to the title. This is important for three reasons. The first is to make sure that everything that should transfer to the academy does transfer. The second reason is to satisfy the Department for Education. The third is to ensure that the academy trust knows what property rights and liabilities it is taking on.
The investigation stage requires an identification of the site, establishing who owns it, locating the title deeds or checking the title at the Land Registry, establishing who is in occupation of the school property and undertaking searches to identify such matters as planning, drainage and water, environmental, chancel repair and coal mining liability.
These investigations may reveal a number of problems. Examples are that the site is held by a different person or body than should be the case and that people are in occupation without any written agreement. Common areas of difficulty are caretaker's houses and jointly used facilities such as sports centres and leisure centres.
It is important also to establish the financial history of the property and in particular who provided the site originally and on what terms, who paid for the buildings and whether there is any possibility that the site will revert to the ownership of a third party if the use changes. In particular, it is important to identify what property has been publicly funded and what has been privately funded.
Once the background information has been gathered, it is necessary to consider how the academy trust will occupy the site after conversion. This will depend on the category of the school that is converting.
Although the Academies Act 2010 refers to property "transfer" on conversion, the academy trust may either take a transfer of a freehold interest or a transfer of an existing leasehold interest or be granted a new lease. In other circumstances, there may be no "transfer" as the academy trust will continue to occupy the school site under a licence agreement.
Whilst the Secretary of State has power to make directions in relation to school property that is publicly funded, these powers do not apply to privately funded property. In the latter case, it is necessary to negotiate future arrangements with the owners or trustees of the property.
Finally, schools seeking to convert to academy status should be aware that the Education Bill 2011 amends the legislation contained in the Academies Act 2010. It is important, therefore, that those advising the school seeking conversion keep a close eye on the changing legislation.
John Steel is a partner in the Charities team of law firm, Blake Lapthorn
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