Keep it legal: School sites

Property developers are always interested in acquiring sites for new housing or commercial uses, and the prospect of realising the value in disused educational sites can be a significant lure - or even a lifeline - for educational charities.

However, trustees must be aware of the trap lurking in the arcane law relating to the 'reverter' of school sites.

The School Sites Reverter Act 1841 sought to incentivise landowners to donate up to an acre of land for educational use. At that time, the principal providers of education were religious charities, so the 1841 act contemplated the provision of a school in each Anglican parish. There were no Roman Catholic parishes until 1850, when the Catholic hierarchy was readmitted to Britain. The grantor was given a statutory promise that, should the school close, the land would be returned to his estate.

Problems arose when the ending of the original purpose was either not noticed by the grantor or any heirs, or where the purpose changed, so that disputes arose as to whether there was a case of reverter.

If recovery of the land was not sought in time, then the claim would be statute-barred after 12 years. To address this problem, the Reverter of Sites Act came into force in August 1987. Where reverter would have occurred under the old regime, the proceeds of sale would now be held on trust for the person who would have been entitled to regain the land itself.

Time cannot run in favour of a trustee against a beneficiary, so where the 1987 Act applies, the proceeds of sale will forever be held on trust.

If they are spent or used for other purposes, the trustees will be liable to reimburse the beneficiary on demand.

If land was originally granted under the 1841 act, the key question on any disposal is when the original purpose ended.

If it ended earlier than August 1975, any claim by the estate of the original grantor would be statute-barred. Any later, and the proceeds of sale will forever be held for that estate.

The possibility of the act applying is therefore highly significant on any sale of land that has been held for educational purposes for a substantial period and where educational use has ceased since 1975.

  • Jane Kenyon is a solicitor at Clarks Legal LLP 

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