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Letting Hiring

The Case Studies. UAC" an unincorporated association disposing of part of its building by leasePlaygroup" an incorporated charity acquiring a licence to occupyCorp" an incorporated charity disposing of part of a building by a short term leaseJRM" an incorporated trust acquiring a long term le

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Letting Hiring

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    1. Letting & Hiring Tuesday 13th May 2008

    2. The Case Studies “UAC” an unincorporated association disposing of part of its building by lease “Playgroup” an incorporated charity acquiring a licence to occupy “Corp” an incorporated charity disposing of part of a building by a short term lease “JRM” an incorporated trust acquiring a long term lease

    3. Four key areas How does the charity hold property? Charities Act 1993 & general duties To lease or not to lease? The terms of the letting or hiring

    4. How does the Charity hold property? Different types of constitutions: Unincorporated Incorporated How property can be held

    5. Incorporated or not? Unincorporated Association Unincorporated Trust Incorporated

    6. Incorporated charities Companies Act 1985 The Industrial & Provident Societies Act The Friendly Societies Act By Royal Charter By Statute

    7. How is the property held? By the charity itself By the trustees for the charity By the Holding Trustee By the Official Custodian for Charities

    8. Considerations Trustees general duties Common sense! S36 Charities Act 1993 disposals

    9. Trustees General Duties Joint and several liability Management of land Must act in charity’s best interests Honesty & skill and care Control of management of land Seek advice from independent professionals Act together

    10. Considerations for Trustees before letting property Do the trustees have the power to dispose of land? Is the disposal beneficial to the Charity? Are the terms of the disposal the best that can be obtained for the charity? Is charity commission consent to the disposal required?

    11. S36 (1)Charities Act 1993 “Subject to the following provisions, no land held by or in trust for a charity shall be conveyed, transferred, leased or otherwise disposed of without an order of the court or of the Commission”

    12. S36(3) Charities Act 1993 Requirements (leases of more than 7 years) Surveyors report Advertising Is the deal right?

    13. S36(5) Charities Act 1993 Requirements for leases of less than 7 years Obtain advice Consider ability & experience of advisor Is the deal right?

    14. Implications of s36 for the Tenant Under legislation – only a statement required in the document But is the deal right? Best practice to get advice even if not compulsory

    15. To lease or not to lease? What is the best method of disposition for a landlord or tenant? Lease Fixed term lease Periodic tenancy Tenancy at will Licence to occupy

    16. Leases Fixed term lease Granted for stated number of years Exists as a legal estate If for more than 3 years must be a deed Periodic tenancy Runs by reference to stated period

    17. Leases Notice mirrors length of term Not need to be in writing or by deed Care needed Tenancy at will Either party can terminate at any time A personal relationship

    18. Licence to occupy Permission to do something on landowner’s property Not a lease A personal right or permission Not an estate in land No exclusive possession No s36 Charities Act 1993 requirements

    19. Clauses suggesting a licence Obligation not to interfere with owner’s rights of possession Owner can transfer occupation to another property Use allowed only at certain times

    20. Clauses suggesting a lease The reservation of specific rights of entry to view or repair for the landlord A fixed or periodic rent at a term A covenant for quiet enjoyment A forfeiture clause

    21. Why is the distinction important? Part II of the Landlord and Tenant Act 1954 (“the 1954 Act”) Imposes security of Tenure if property occupied: At the end of the term By the tenant For the purpose of the tenant’s business Subject to exceptions

    22. Security of tenure Some exceptions: Tenancies at Will Leases granted for a term certain of six months or less, unless either: The tenant, together with any predecessor in business, has been in occupation for more than 12 months The tenancy contains provisions for renewing the term or for extending it beyond the initial six month period

    23. Contracting out Tenant can agree to give up its right to security of tenure A notice must be served by the landlord Tenant must sign a declaration or swear a statutory declaration

    24. The terms of the letting or hiring The extent of the Property to be let; The term of the lease The rent that is to be paid and other costs that the tenant should meet The use that the property can be put to Alienation provisions

    25. The terms of the letting or hiring Security of tenure Alterations to the property Repairing obligation Insurance Break clauses and forfeiture Rights reserved to the landlord

    26. Specific issues for Tenants Stamp duty land tax Registration at the Land Registry

    27. Please feel free to ask any questions Thank you for your attention

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