Committee Financial requirements clouded by Charity status.

Question

The Parish Hall was purchased for £1 by the Parish Council in 1970. The deeds state that the Parish Council is the Trustee of the Village Hall.

The deeds stipulate that It is to be administered by Committee as a Charity with the Parish Council as the Custodian Trustee.

The deeds require the VH Committee to insure and maintain the fabric of the building, submit audited accounts annually to the PC and invest any surplus income from lettings. The lettings generally only cover expenses and any expensive maintenance costs fall to the PC to pick up.

Does the Charity status make the VH Committee financially independent or does the ownership by the PC hold the financial trump card?

Answer 1

This is a complex area of law, so if you need certainty, you should seek specialised professional advice.

My view is that the Parish Council owns the Parish Hall only as Trustee, and therefore has no ownership rights beyond those stipulated in the legal documents that created the present situation.

However, there is an obvious difficulty if the Charity administering the Hall becomes insolvent, something that is likely to happen if the Parish Council chooses not to pay for expensive maintenance.  Exactly what would then happen depends on the precise terms of the documents and charity law.

It's also my view that these arrangements do cause a lot of trouble for conscientious councils, since the council has only very limited jurisdiction over how the charity is managed, but is expected to pick up the pieces when things go wrong.  But I don't know of any solution to this problem.  If anyone has a solution, I would be very glad to hear it!