Financial responsibilities of a Custodian Trustee

Question

What actual financial liability does the Parish Council have for a village hall in terms of covering an income shortfall because of COVID 19, significant repair costs for a new roof and lastly default on a mortgage of part of the hall complex used for an extension?

Answer 1

Surely it all depends on the PC's legal position. Are they custodians or are they trustees or are they custodian trustees. Surely their conditions and requirements and liabilities are enshrined in their constitutional documents? As they are a public body then a FOI  request will bring such documents to light

Answer 2

It is important that you clarify the legal status of the Parish Council in relation to the village hall.  You should already hold the documents to confirm this, but it is helpful to carry out a Land Registry title search too.  This can be done online for £3.

If the Council is a custodian trustee, holding the building on behalf of the owner (either a local unincorporated charity or an external body such as the Church), the Council has no financial liability whatsoever.  It has the power to offer financial support to safeguard the community asset, but no obligation under any circumstances.  If you're an ACRE member (and if not, why not?!), they have a couple of useful information leaflets that explain this in more detail.

As an aside, you mention an extension.  I hope that the extension is/was built on land belonging to the owner of the hall, or that appropriate leases were signed beforehand.  I mention this only as I'm trying to unscramble one that wasn't and that isn't easy to do retrospectively!

Comments

You will note that from another thread that I have had an ongoing problem with how PC manage charities particularly those that are operated by management committees which often include puppet trustees. The bottom line is that as indicated in LTN28 the PC has no financial or governance responsibilities whatsoever and indeed with a formal complaint I made the PC stated that all grants were voluntary