Charities are significant land holders in England and Wales yet much of the land held by charities is still unregistered. This is because charitable land is often held by a charity for many years and there may be no transactions triggering a requirement for compulsory registration at the Land Registry. However, a charity may wish to consider undertaking a voluntary registration exercise of its land to enable the trustees to demonstrate they are complying with their fiduciary duty to protect the charity’s assets.
- Having a registered title to its land assets will give the charity better protection against a third party claiming rights over or ownership of its land. Trustees must keep an address for notification up to date but, provided this is done, the trustees should receive notification from the Land Registry of any applications that are made in relation to the charity’s land and this should allow the trustees to take early action if an erroneous claim is made.
- Once registered, a charity’s land will benefit from a state backed guarantee of title and the charity will be entitled to compensation from the Land Registry (subject to certain exclusions such as fraud) should its registered title be subject to rectification. Rectification is the alteration of a registered title to correct a mistake which prejudices the registered proprietor.
Alongside the above mentioned benefits, charity trustees may find that carrying out a voluntary registration project allows them to consolidate and audit the charity’s land assets and, going forward, the exercise should assist with the smooth running of property transactions.
Practical tips for a Voluntary Registration Project
- If you are registering the assets of an unincorporated charity, consider vesting them in the Official Custodian of Charities to avoid having to change the proprietor’s register every time a trustee retires or a new trustee is appointed.
- The Land Registry offers reduced fees when undertaking voluntary registration. A charity with significant land holdings may want to consider approaching the Land Registry to work with a designated project team to complete the registration.