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Land Transfer

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    LAND TRANSFER ADVICE VERSION 9.0 February 2012

    Contents

    About this guide, and version control Page 02

    Key principles (para 1) Page 03

    Establishing school status and history (para 2-4) Page 03

    The Land Questionnaire (para 5-9) Page 05

    Community schools (para 10-18) Page 06

    Foundation schools without foundations (para 19-33) Page 08

    Transfer of a leasehold interest (para 24-29) Page 09

     Transfer of a freehold interest (para 30-33) Page 10

    Foundation schools with foundations (Trust Schools) Page 11

    (para 34-42)

    Voluntary-Aided schools (para 43 56) Page 13

     Definition of private/public land (para 44-48) Page 13

     Transfer of public land to the AT via a direction (para 49) Page 15

     Transfer of public land to the AT without a direction (para 52)Page 15

    Private land (para 53) Page 16

    Voluntary Controlled schools (para 57-58) Page 17

    Directions and Trust Modification Orders, (para 59-77) Page 17

     Direction to a governing body (para 60-62) Page 17

     Direction to a Foundation or Trust (para 63-68) Page 18

    Trust Modification Orders (para 69-74) Page 19

     Trust Modification Order at RC Schools (para 75-77) Page 20

    Disposal of publicly funded land that is no longer to be used Page 20

    for an academy (78-79)

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    Department for Education supplementary content: Advice on land transfer issues: V9

     February 2012

    About this guide.

    This guidance is a toolkit for schools converting to Academy status, and especially for their lawyers. It provides general advice on the arrangements that will need to be put in place to secure the use of land for an Academy and gives the department‟s starting point on how this should

    be handled for each main category of school. It will also be of assistance to local authorities in understanding the framework in respect of land when a school wishes to convert to Academy status,

    However, this guide does not constitute legal advice. Experience has shown that land issues can be complex with unique arrangements at individual schools. It will therefore always be important for schools to take their own legal advice, and for the individual history and circumstances of each school to be fully considered. Your Academies Project Lead can provide further information, and model documentation is available on the Department‟s website.

Version control.

This version of the Department‟s advice is version 9.0, dated February

    2012. It replaces all previous versions of external advice as published via the Department‟s website.

    The changes in this version of the guidance are designed to do the following:.

    1) Reflect changes arising from the commencement of provisions on

    the treatment of land contained in the Education Act 2011, especially

    Schedule 14 to the Act which introduces a replacement to Schedule 1

    of the Academies Act 2010.

    2) Introduce a new process for identifying land through “land

    questionnaires”. These will replace the Summary Report on Title

    introduced in version 8.0 of this guidance, and are designed to be

    completed earlier in the conversion process. They are tailored for each

    category of school, and the aim is to focus on the key considerations

    for each type of conversion, so that we can resolve any issues earlier in

    the process, and avoid last-minute delays. Copies of the

    questionnaire for each category of school are available via the

    Department’s website, and this guidance should be considered in

    conjunction with those questionnaires.

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    Key Principles

    1. The key concerns for the Department in resolving land issues are to ensure the appropriate protection of public land and secure the future of the Academy on the site. Arrangements should also ensure the protection of both public and trustee value in land held by any other trust for the purposes of the Academy. These are the Department‟s key considerations in dealing with

    land issues.

Establishing school status and history

    2. The Department‟s arrangements for land transfer need to take account of:

    a. the current category (community, foundation without a

    foundation, foundation with a foundation, voluntary aided or

    voluntary controlled) of the existing school;

    b. the history of the school, including details of any change of

    category, and/or any particular land arrangements that were

    made when it was set up, and

    c. the current arrangements by which land is held for the purposes

    of the school (see paragraph 4).

    3. The Governing Body (GB) and any trusts of the existing school and the Academy Trust (AT) must be clear about what land is intended to be used for the new Academy and, wherever possible, have confirmed that the relevant local authority agrees with their assessment. Title deeds, copies of land registry entries and plans/maps are all useful source documents. The land questionnaires (further details below) should then be completed in accordance with that view.

    4. Set out below are the basic land arrangements which usually apply for different types of maintained schools. There are also flowcharts available via the Department‟s website to assist with determining the school‟s history and possible land issues. Later sections of this advice deal with each of these categories in further detail and explain how land should be treated when the school converts to Academy status:

    Category History How is land currently

    now held

    Community Not usually a factor Almost always by local

    authority

    Foundation Foundation schools which Almost always by

    without have been in existence for governing body (if not,

    foundation some time are likely to have refer to Policy Lead)

    Note: publicly funded been a grant-maintained (GM)

    school prior to 1998, and a land will have

    county school (similar to a transferred automatically

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    Department for Education supplementary content: Advice on land transfer issues: V9

     February 2012

    community school) before that. to the governing body

    If the school was previously through operation of law

    GM, land will have also been when the school

    held by the governing body became a foundation

    then school even if the

    authority have not

    formally completed the

    necessary paperwork

    (form TR1).

    Usually no private land

    (if there may be, refer to

    Policy Lead).

    Foundation Is likely to have been a Land will usually be held

    with community, VC or VA and/or by foundation or foundation GM school in the past. trustees.

    (some of Note that it is possible for a

    which are school to have changed from Some land may

    also known VA or VC to GM and thence to occasionally be held by as Trust foundation. It is also possible the local authority or by schools) for a school to have been set the governing body.

    up as a foundation school with

    a foundation. There may also be

    private land as well as

    public land (particularly if

    the foundation predates

    2006).

    VA May have been a VC and/or Land may all be held by

    GM school in the past. foundation or trustees.

    May have been set up to

    replace a community school or Some land may be held

    a foundation school without a by the local authority or

    foundation. by the governing body,

    May previously have been a and it is very likely that

    foundation school with a playing fields are.

    foundation.

    May have been set up Very likely to be an

    recently or a long time ago - element of private land.

    as a VA school.

    VC May have been a GM school Land may all be held by

    in the past. foundation or trustees.

    May have been set up to

    replace a community school or Some land may be held

    a foundation school without a by the local authority or

    foundation. by the governing body,

    May have been set up recently and its likely that

     or a long time ago as a VC playing fields will be.

    school

    Very likely to be an

    element of private land.

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

Land Questionnaires

    5. Once the current status and history of the school is established, lawyers acting on behalf of the Academy Trust will be preparing a “Report on Title” for

    the school in relation to the land that will be used for the Academy. The Report on Title is a legal document which sets out, amongst other things, the exact nature of those plots of land, who holds them and on what basis, who previously held the land, details of trustees, details of any restrictive covenants that apply to the land, and the need for any modification of existing Trust documents.

    6. Before agreeing conversion, DfE needs to see similar information to that which is contained in the Report on Title, setting out the proposed land arrangements for the Academy and dealing with the points set out below. Previously we asked for a Summary of the Report on Title to be prepared for us. However, in order to ensure that we target specific issues with particular conversions earlier in the process, we are now replacing this summary report with a dedicated land questionnaire for each category of converting school which asks specific questions which will need to be answered in order for the school to convert. The completed questionnaire should be submitted to DfE for clearance as early in the process as possible and within any individual

    deadlines quoted by project leads - along with any Directions to Transfer and Trust Modification Orders that will be required. The questionnaire can be found on the Department‟s website.

    7. The answers given in the land questionnaire will form the basis for all decisions on how the land will be treated, and what leases, directions, and land supplemental agreements are needed. It is therefore vital that the

    lawyers acting for the school provide as full and complete answers to all the questions asked as possible, and do so within deadlines set by the relevant project lead. Getting to the bottom of these land queries early on will help reduce the likelihood of delay to the conversion. Depending

    on the category of school, the questionnaires will cover the following, and it is advisable to consider the relevant questionnaire alongside this guidance:

    ; Identifying all the land currently held for the purposes of the

    converting school;

    ; by whom that land is held (ie is it held by the local authority, GB,

    foundation, other trustees or some other third party);

    ; whether any land is publicly funded” within the meaning of

    paragraph 22(3) of schedule 1 to the Academies Act 2010 (as

    amended)

    ; whether the land is held freehold or leasehold;

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    ; whether the school has the benefit of any shared use

    arrangements/shared facilities or allows other parties to use

    facilities on its land, and if so what arrangements are proposed

    post-conversion..

    ; any additional leaseholds or access rights which have been agreed

    or granted, or are outstanding to be agreed or granted, against plots

    of land within the school estate; any disposition of the registered

    estate by the AT upon conversion will require Secretary of State

    consent in accordance with the terms of the Funding Agreement.

    ; any contracts which are currently outstanding on the land or on

    improvements to buildings on it;

    ; what the proposals are as to how the land will be dealt with on

    conversion

    ; ,where directions to transfer land are required these should be

    drafted by the school‟s solicitors (cleared with Trust‟s solicitors

    where applicable) using the templates on the DfE website and

    drafts attached to the Land Questionnaire for DfE clearance;

    ; where a Trust Modification Order is required a draft should be

    provided (using templates on the DfE website) along with a copy of

    the trust document that is being amended, for DfE clearance;

    8. For some schools, becoming an Academy may be the first ever trigger for the land to be registered with the Land Registry as much school land is currently unregistered. However, in most cases, it should not be necessary for lawyers for the GB/AT to go into extensive detailed and complex background searches into previous land ownerships and titles.

9. In cases where land is held by foundations, the foundation‟s lawyers will

    need to check their charitable schemes for restrictive covenants which might require special action (eg they might be restricted to a maintained school, and might need to be changed to allow the use of the land by an Academy). The land questionnaire is the key documentation required by the Department.

Community schools

    10. These schools account for the majority of schools in England. They almost always occupy public land, which will be held by the LA.

    11. For community schools converting to Academy status, the land will be leased to the Academy Trust on a 125 year lease for a peppercorn rent as for most previous Academies. The land clauses preventing the AT from disposing of its leasehold interest in the public land will need to be included in the Funding Agreement (the same as for freehold transfer for foundation schools, as detailed at paragraph 30 below).

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    12. While there is no requirement for a 125 year lease in statute, we have always been clear that this is the Department‟s expectation, and we will not

    normally accept a shorter-term lease than this except in exceptional

    circumstances, for example where the authority itself only holds the land on a leasehold basis, and the term is less than 125 years.

    13. It is not possible for the Academy Trust of a converting community school to have a freehold interest in the land on becoming an Academy. Community schools have no ownership of the land before becoming Academies, and because, as much as possible, we wish to see schools convert with arrangements that mirror their current arrangements, they may not gain land ownership as part of the conversion.

    14. Where the school has the benefit of any shared use arrangements or other formal agreement for the use of facilities or allows other parties to use facilities on its land (e.g. a Sports Centre, nursery, Sure Start Centre etc) then depending on the local situation, a number of different arrangements may be possible post-conversion. Where the facility is transferred to the Academy, these could include the leasing back to the local authority of the land on which the facility is located, the signing of a shared use agreement, or the Academy sub-leasing the land to the community user. Where the facility is remaining in the ownership of the local authority (or is owned by some other body), the AT will wish to negotiate an appropriate use agreement with the landlord. Project leads can advise further on available options.

    15. In situations where the school will be running a community use Sports Centre or other such community facility, the Department will need to consider the arrangements and may require a subsidiary company to be set up and require additional clauses to be inserted in the Funding Agreement and Articles.

    16. The GB/AT will need to confirm with the relevant Project Lead (when the signed Funding Agreement is sent to DfE, having been executed by the Academy Trust) that they have completed and signed a lease with a specific date for transfer (a model is available on our website). In some cases a draft lease, which has been agreed with the local authority (if it is confirmed that all the significant terms of it are agreed) may suffice even if it has not yet been executed by the /AT. Where the authority does not itself hold the freehold interest in the land, but instead holds the land on a leasehold basis, there will need to be a sub-lease from the authority to the AT. The land questionnaire should identify whether the land used for the school is held on a freehold or leasehold basis. Similarly, any sub-leases, shared use agreements, or other contracts relating to that use are also completed and signed with a specific date for transfer

    17. If the local authority and the GB/AT have been unable to complete the lease by the time the Funding Agreement is signed and sent to DfE, then if the AT and the authority agree, a Licence to Occupy (also known as Tenancy at Will) can be used to enable the Academy to open on the preferred date (a model is available on our website). However, this is intended only as a short term solution until the full lease can be agreed, and can only be used where

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    public land is held by the authority or transferred back to the authority. A Licence to Occupy will only be approved by DfE where all significant terms of the lease are already agreed by both parties such that there are assurances that the lease will be agreed shortly after conversion. It will not be used simply to allow a school to convert on its chosen day if there are still significant issues around the way land transfers will be dealt with.

    18. The Department‟s expectation is that the local authority and the AT

    will make the necessary arrangements for the land transfer. The GB/AT should keep their Project Lead updated on progress with the land transfer, and project leads will ask the AT Lawyer for copies of correspondence with the authority.

    Foundation schools without foundations

    19. The land of foundation schools without foundations will almost always be held by the GB. The land will have automatically transferred to the GB when the school became a foundation school, regardless of whether the local authority has formally completed the appropriate documents (TR1 form). The authority‟s failure to complete the documentation will not delay the conversion. 20. Because most foundation schools will have become foundations after being something else, it is important to trace back the school‟s origins and

    determine what it was before it was a foundation school, as this is useful to provide background on the land‟s history. In very rare cases private land may

    be used by a foundation school without a foundation. For these, see notes on voluntary schools below.

    21. The transfer of public land can either be effected by the transfer of the freehold interest back to the local authority (this happens automatically when the GB dissolves on conversion) which then leases the land to the Academy Trust (using our model lease); or by transfer of a freehold interest to the Academy Trust effected by a Direction to Transfer (under the Academies Act), and the Project lead will check with the AT which it would prefer. There may be rare cases where the GB has only ever had a leasehold interest in the land. If this is the case then only a leasehold will be able to be transferred to the Academy Trust by Direction to Transfer. The land questionnaires should identify whether the land used for the school is held on a freehold or leasehold basis.

    22. Where the school has the benefit of any shared use arrangements or other formal arrangements for the use of facilities or allows other parties to use facilities on its land (e.g. a Sports Centre, nursery, Sure Start Centre etc) depending on the local situation, a number of different arrangements may be possible post-conversion. Where the facility is transferred to the Academy these could include the leasing to the authority of the land on which the facility is located, the signing of a shared use agreement, or the Academy leasing the land to the community user. Where the facility is remaining in the ownership of the local authority (or is owned by some other body), the AT will wish to negotiate an appropriate use agreement with the landlord. Project leads can advise further on available options.

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    23. In situations where the school will be running a community use Sports Centre or other such community facility, the Department will need to consider the arrangements and may require a subsidiary company to be set up and require additional clauses to be inserted in the Funding Agreement and Articles.

    Transfer of Leasehold Interest

    24. For the AT to have a leasehold interest, the existing GB‟s interest will

    have to be transferred back to the local authority and then leased by the authority to the AT on a 125 year lease for a peppercorn rent. The GB/AT will need to confirm that they have completed and signed a lease with a specific date for transfer (a model is available on our website). All leases of public land between the local authority and the AT should at inception be for a minimum of 125 years (although a sub-lease where the authority does not hold the freehold may be governed by the original lease between the authority and the freeholder). The GB/AT (or their lawyers) will need to confirm in writing/by email that they are content to have a leasehold interest and that they have so informed the Local authority. Similarly, any sub-leases, shared use agreements, or other contracts relating to that use are also completed and signed with a specific date for transfer

    25. Under the provisions of the Academies Act 2010 any land held by the Governing Body will automatically transfer to and vest in the local authority when the Governing Body dissolves on conversion (unless the SoS has directed otherwise). The Department will check that the authority has drafted a lease and that this is for at least 125 years for a peppercorn rent. 26. The GB/AT will need to inform their named DFE contact that they have completed and signed a lease with a specific date for transfer (a model is available on our website).

    27. The Funding Agreement must contain the land clauses as detailed at paragraph 30 below to prevent the AT from disposing of its interest in the public land (as for transfer of a freehold interest in land).

    28. Project Leads dealing with transfers of a leasehold interest will ensure:

    ; That the AT (or their lawyers) confirm in writing/by email that they

    wish to have a leasehold interest and that they have agreed this

    with the LA.

    ; That the local authority has drafted a lease and that this meets the

    requirement that it is for at least 125 years for a peppercorn rent.

    These schools will need to confirm to PLs that they have completed

    and signed a lease with a specific date for transfer (model available

    on the website).

    29. If the local authority and the GB/AT have been unable to finalise the terms of the lease by the time the Funding Agreement is signed and sent to DfE , then if the AT and the authority agree, a Licence to Occupy (also known

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    Department for Education supplementary content: Advice on land transfer issues: V9 February 2012

    as Tenancy at Will) can be used to enable the Academy to open on the preferred date (a model is available on our website). However, this is intended only as a short term solution until the full lease can be agreed, and can only be used where public land is held by the authority or transferred back to the LA. A Licence to Occupy will only be approved by DfE where all significant terms of the lease are already agreed by both parties such that there are assurances that the lease will be agreed shortly after conversion. It will not be used simply to allow a school to convert on its chosen day if there are still significant issues around the way land transfers will be dealt with. Transfer of Freehold interest

    30. The GB of a foundation school without a foundation may wish the AT to have the freehold interest in the land on conversion. In such cases, the

    Secretary of State will need to use his powers under the Academies Act 2010 to direct that the land currently used for the purposes of the school (and held by the GB) is transferred from the existing GB directly to the Academy Trust. In these cases:

    a. the land MUST be transferred further to a direction as set out in

    paragraph 31 below. It cannot be transferred by private arrangement

    between the GB of the converting school, the AT and the local authority

    and

    b. the funding agreement MUST contain: (1) provisions protecting

    the public land from disposal (e.g. by being leased or mortgaged) without

    the Secretary of State‟s consent; (2) requiring a restriction to be registered

    with the Land Registry to reflect these provisions; and (3) requiring the AT

    to apply for notice to be entered in the Land Register to protect the

    Secretary of State‟s option to acquire the land for nil consideration. The

    Funding Agreement will also oblige the Academy Trust to insure the land

    and buildings and maintain them in at least as good a condition as when

    they were transferred. Standard funding agreement clauses can be

    viewed on our website.

    31. Project Leads dealing with transfers on a freehold basis will ensure:

    ; That the GB/AT (or their lawyers) confirm in writing/by email that

    they wish to have the freehold interest of the land currently held by the

    GB for the existing school transferred to the AT. If the GB does not do

    this the land will revert to the authority when the school converts.

    ; That the AT lawyers have prepared a draft Direction to the GB to

    transfer the land from the GB to the AT (a model direction to the GB

    can be viewed on our website). The Direction will require the transfer

    to be effected (by the lawyers for the AT/GB) prior to the conversion

    date. The Direction to Transfer will be formally issued and signed on

    behalf of the Secretary of State when the Funding Agreement is

    executed by the Secretary of State.

    ; That the GB/AT has informed the local authority of the land

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