Residential property
20 Jul 2020 News

Land Ownership by Charities

There are both rights and responsibilities that come with owning land and property.  This is even more apparent when the land is held by a charity, given it has an overriding obligation to provide public benefit.  The Scottish Land Commission has produced a number of protocols in relation to good ownership of land in Scotland and in particular around community engagement.  What is notable about the latest protocol is that it singles out charity landowners from other landowners and places on them a specific set of expectations in relation to the way they manage their land.

Many involved in land ownership in Scotland will be aware of the Scottish Land Commission agenda to increase both transparency and accountability when it comes to owning land and recent protocols (which apply equally to charity landowners as well as other landowners) have already set out a number of expectations coupled with guidance as to how the Scottish Land Commission sees such behaviours working in practice.  A link to the publications can be found here.

It is clear in all of the publications that charity Trustees must put their duties under the Charities and Trustee Investment (Scotland) Act 2005,their powers and their own constitution first and foremost.  However this recent charity specific protocol then turns to what charities should be doing in relation to their ownership of land and engagement with local communities.

In their Good Practice guidelines, the Land Commission sets out 12 specific expectations that they have for charity Trustees who own land in Scotland:-

Note that when the protocol uses the word ‘should’, it has a special significance, but without creating a legal requirement. The protocol text says “Where we use the word should, we expect everyone involved to follow the approach described, unless it conflicts with their legal duties.”

  1. Charities should make sure that up to date information about who the Trustees are and a main point of contact for the land is publicly The concern is that the charity landowner should not be a faceless organisation and therefore there should be information not only as to who the trustees are, but where contact can be made with someone who can speak for the Trustees whether that is one of the trustee, a land manager or other agent.
  2. Trustees should be proactive and transparent in sharing information about land held activities carried out the land and the public benefit that is derived from them. Again this can often be held within the Trustee’s annual report which, depending on the size and nature of the charity may be publicly available from OSCR’s website.  If the organisation is not a SCIO, nor does it generate sufficient income, its accounts may not be published on OSCR’s website. It is worth considering publishing these on your own website, not just in terms of the land ownership but also as it can effectively be used as a shop front when it comes to grant applications etc.
  3. The Scottish Land Commission has published protocols on community engagement and decisions relating to land. Much of this is fairly straightforward and information can be found here.  It is important to note that none of this overrides the overarching charitable purposes and powers in the Constitution and therefore care must be given to ensure that the charity Trustees are free to make decisions in relation to fulfilling the charitable purposes of their organisation which, on occasion, may differ from the interests of the community.
  4. When reviewing operational strategy in relation to their governing document and their charitable purposes, Trustees should consider the ways in which they can engage and work with their local community. Again this should be par for the course when it comes to charities who are set up for the help of the local community.  You would hope that most charities would indeed consult with their stakeholders when it comes to their reviews and their strategy.  However it is important to note that not all charities who own land in Scotland will be set up for the benefit of the community in which that land is situated and therefore it is important to manage such expectations rather than having a tick box approach to consultation which may do more harm than good. 
  5. Community engagement plans should be prepared by all charities who own land and property – the guidance is clear that these plans should be proportionate in terms of the charity and there is more information on the practice guide about developing an engagement plan for such decisions.
  6. If charity Trustees are looking to make changes to the operation of the land they should consider the effect on the local community. Again this should be a given where the charitable purposes align with the community interest however that is not necessarily always the case.
  7. Charity Trustees should reflect on whether the governance of the land and property can be more closely linked with the Scottish Government’s Land Rights and Responsibilities Statement – while it is always good practice to involve the community, it is important that care should be taken to ensure that the correct governance is in place and not make change simply for change sake.
  8. Charity Trustees should regularly review their governance and consider the skills and knowledge necessary to carry out their roles – again this should go without saying, however the Scottish Land Commission recommends ensuring that you have proper knowledge of the local community in the area where the land is owned to ensure that that knowledge can be brought to the Board for benefit of the charity and the community as a whole.
  9. Consideration should be given to appointing charity Trustees from the local area where the land is held – this falls in line with the above, however again care would have to be taken with regards to conflicts of interest as those who are involved in the community can often wear more than one hat and this needs to be managed carefully.
  10. Where a community group approaches the charity for a transaction with regards to the land for example purchase or Lease then the decision making process should be transparent with clear reasons being given by the Trustees to their organisation.
  11. When considering the sale or Lease of a land the charity Trustees should consider opportunities for different types of organisations to own and manage it particularly around sustainable development by local residents. This does not mean that they would have to be the preferred candidate, however it should be taken in line again with the charitable purposes and the Trustees’ duties to act in the best interests of the charity at all times.
  12. The Trustees should consider requests to be involved in decision from relevant constituted community bodies or organisations. Again further guidance can be found on the Protocol on Community Engagement in Decisions Relating to Land.

It is clear from the above, that the drive to increase accountability and transparency in the ownership of Land in Scotland is likely to be here for the long term. This aligns very neatly with the OSCR’s ambition to generally augment public confidence in charities by increasing transparency and accountability within the charity sector. These two combined make a very strong case for ensuring that all decision making, and especially decisions relating to land, are made in a clear, well-reasoned and timely fashion and that records are kept, not only of the decisions taken but the justification of them.

We would encourage any charity who owns land in Scotland to familiarise themselves with the protocols mentioned and take them into consideration in the decision making process.  By virtue of the fact that a specific protocol has been created for charities, it is clear they will be under the spotlight when it comes how they operate their land.

For further guidance about land ownership by charities please get in contact with Lianne in our charities team whose contact details can be found at the top of this article.

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