Local authority land disposals and rights of reverter

Updated May 2011

Much attention is currently focused on plans by local authorities and other public bodies to dispose of property. Many local authorities have concluded their public consultation and an often very difficult decision making process. News of proposals to sell everything from libraries to allotments is now beginning to emerge. We may have only seen the beginnings of a large scale programme of disposals over the next few years.

One aspect that local authorities will need to consider is their legal power of disposal, in each case. Opponents of these sell off plans may be quick to seize on any weapon at their disposal, if it seems that a sale can be prevented or delayed.

One element that has received little attention over the years is the circumstance where the authority holds the property on trust, due to the existence of statutory rights of reverter. Various statutes from the 19th century apply, the most common being:

• School Sites Acts 1841, 1844, 1849 and 1852
• Liberty and Scientific Institutions Act 1954
• Consecration of Churchyards Act 1867
• Places of Worship Sites Act 1873

This legislation encouraged the 'donation' of land for public or charitable purposes on the basis that if the land ceased to be used for the relevant purpose it would revert to the original owner.

Numerous grants such as this were either in favour of local authorities, or persons and bodies whose functions have since been assumed by central, local and public/quasi-public authorities. Many of these sites will continue to be used for the intended purpose, but it is inevitable that changing requirements or circumstances, as well as the current need to identify 'surplus' land and generate cash, will mean that some sites that are subject to rights of reverter will come forward for disposal.

The Reverter of Sites Act 1987 was intended to clarify some of the problems in this area but doubt has continued over:

• circumstances where a second trustee should be appointed to ensure a buyer overreaches the statutory trust created by the 1987 Act; and
• entitlement to proceeds of sale and what can be done with them if they are not to be paid to the successors in title of the original owner.

In 1981 the Law Commission estimated there were still at least 2,000 school sites that had been conveyed under the Victorian legislation, entitling the sellers to rights of reverter.

TLT can assist public sector bodies with this and all other aspects of land disposals. Our team is already instructed on projects of this nature, including by several police authorities. Where required, we can verify powers of disposal, advise on elements such as exclusivity and non disclosure agreements, review heads of terms and deal with claw back and other similar arrangements. We have also assisted with the review of estates information and deeds archives and worked with public sector clients on a programme of first registration of titles, giving priority to sites identified for disposal.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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