Trustees have a responsibility to manage charity property responsibly and to make sure assets are only used to support of carry out its purposes. It also has a duty to ensure the charity can continue in the absence of a key trustee. But what happens when a charity becomes dormant or trustees die and their fellow trustees fail to act?

In a recent case reported by the Charity Commission, a valuable plot of land which was owned by an unincorporated charity was almost lost because the charity had failed to submit accounts and was struck off the register.

The land had subsequently been occupied under "squatters rights" and had claimed possession through court proceedings. Because the trustees had not responded to the proceedings and the interests of the charity were not being represented, there was a major risk that the charity and its beneficiaries would lose the land.

The Charity Commission commenced an inquiry and as a result found that one of the trustees had died and the remaining trustees were out of England and Wales and could not be found. Under S.80 of the Charities Act 2011, the missing trustees were removed and 2 new trustees appointed and the Charity was subsequently re-instated. Because the land was vested in the old trustees as the Charity was unincorporated, the Commission was able to exercise its powers under S76 of the Act to vest the land in the official Custodian for Charities and intervene successfully in the possession proceedings to retain the land for the benefit of the charity.

So what are the lessons of this for any charity which has assets to protect, particularly land and buildings and a charity to run?

• Firstly, Trustees must ensure that there are appropriate procedures and safeguards in place and that these are followed. This is to ensure that the asset is protected for the benefit of the charity and to ensure they do not breach their duty as trustees. That might include the use of a Land or Property agent or in the case of an Investment Portfolio, an investment advisor
• Secondly, if a charity does become inactive, the charity must be wound up properly in accordance with it's governing document and in accordance with Charity Law.
• Thirdly, when trustees are resident outside of England and Wales and their absence or unavailability impedes the proper administration of the charity, alternative systems must be put into place.

Finally, in a small charity where key trustees play a vital role, there must be succession planning in the event of the death or prolonged illness of the key trustee. These things cannot be left to chance and must be a key risk that every charity but particularly a small charity should have high on their risk assessment.