Transfer of ownership of assets from Charity A to Charity B

A commercial colleague has enquired whether or not any contributors can shed some light on a problem he has been asked to advise on.

Charity A was formed in 1989 for the purpose of providing facilities for education and physical mental recreation to members of the community and for the benefit of the elderly. Charity A appears to have amalgamated with Charity B in around 2005 when Charity A bank account had its name changed from Charity A to Charity B but retained the same treasurer and account number. The Bank have failed to provide evidence as to why that happened.

Charity A has title to some freehold land in the name of 2 trustees, both of whom have since died. Charity A constitution states new trustees can only be appointed by a resolution at a special meeting and it appears no such meeting has ever been called following the deaths.

My colleague’s question is in the circumstances how, if at all, can ownership of the freehold land be transferred from Charity A to Charity B and what evidence will be required by the Land Registry to conclude this? Charity B has the same objects as Charity A.

Iain Robson
Close Thornton

From a conveyancing viewpoint, legal title to the land held for Charity A will be vested in the personal representatives (PRs) of the last surviving trustee, who will have the powers of the last surviving trustee (s.18(2) Trustee Act 1925). Whilst the charity might appoint the new trustees, it is for the PRs to vest the legal title in them. The usual Land Registry form for the transfer of title should suffice.

The concern will likely be to evidence to the PRs to whom they should transfer the legal title. They are entitled to documented evidence as to why they might transfer the title to trustees acting for Charity B when the land was held by “their” deceased for Charity A.

That the bank amended the title of the account to include reference to Charity B suggests there should be documentary evidence of the change around somewhere. It would be unlikely that s recently as 2005 the bank would have made such a change merely on , say, a letter from the account holders.

The first step might be to contact the Charity Commission (CC), if that has not already been done, as there could have been a formal Scheme, or other arrangement sanctioned by, or notified to, the CC.

If there is no evidence of any formal merger of the 2 charities, it might be necessary to discuss with the CC now whether it might be appropriate to apply for a scheme to effect such a merger now.

Paul Saunders

To limit the likelihood of something like this happening again, it may be worthwhile considering appointing more than two trustees to hold the land. My recollection is that there can be up to 5 trustees where there is a charity involved.

Patrick Moroney
BWL solicitors