Property

The holding of property by a charity depends on its legal status:

• Charitable companies and IPSs have their own legal personality, which means that they own the property in its name
• Unincorporated charities (trusts and associations) have no legal personality, which means that the charity’s property must be held by named individuals, either trustees or other individuals who hold as holding trustees or by a custodian trustee. The charity’s trustees are still responsible for the property and the holding trustees or custodian trustee only carry out the instructions of the charity’s trustees. 

If charities own property the trustees are responsible for protecting its value, maintaining its safety and adequately insuring the property. They should ensure sufficient funds are set aside for this. 

There are specific rules or restrictions governing 

• property that is held by a charity as a permanent endowment – that is, given in perpetuity
• the procedures involved in the sale or lease of a charity’s land or buildings
• property subject to trusts requiring it to be used for a specific purpose
• property intended to be sold or let to a trustee or connected person
• property intended to be sold or let to another charity with similar charitable objects
• property intended to be mortgaged.

Trustees should obtain legal advice or consult the Charity Commission’s guidance on property

Remember that trustees of unincorporated charities have unlimited liability. This means that they could be held personally liable if, for example, there are insufficient funds to cover the cost of outgoings on or liabilities arising from a property.