Key considerations when dealing with the sale of school land

Schools will usually enjoy ownership or control of some or all of their land and buildings. This will often include unused playing fields or buildings, which schools should rightly consider how best to utilise in pursuance of their charitable objects. Sometimes, the right thing will be to sell or lease such property in order to obtain some value for an asset that may be a drain on resource. 

When disposing of property, be it either land that the school owns outright (freehold land) or property occupied by the school on a leasehold basis, there are a number of points to consider:

  • Do you want to dispose of the property outright or is leasing it out an option?
  • Have you obtained professional advice from a surveyor or agent on the terms of the sale including the price, deposit and other conditions?
  • If you are retaining any adjoining land consider whether you need any rights over the land being sold e.g. access rights, rights to connect into services.
  • Check to see if an Energy Performance Certificate (EPC) needs to be commissioned for the property – most transactions need a certificate showing the energy efficiency of the property (although there are some exceptions).
  • Discuss with your surveyor or agent whether the property is suitable for development – for example does the property come with lots of land which could be developed or could the property be converted to a different use? If development is possible then it may be necessary to include a clawback or overage provision in the sale. Overage or clawback provisions allow the seller to share in the value of any potential development of the property after it has been sold. However, it will also be important to take tax advice.
  • Consider whether you want to restrict any future use of the land.
  • If the school is planning to sell property which it occupies under a lease then check whether any third party consents are needed e.g. consent from the landlord or management company.
  • Where your school is a charity, ensure that you comply with the requirements of the Charities Act 2011 – this requires a charity to obtain a report from a qualified surveyor before contracts are exchanged to confirm that the terms of the sale are the best that can be reasonably obtained.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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