Are you a charity or community body looking to purchase land or buildings to further your charitable/community aims? The new Ownerless Property Transfer Scheme (OPTS) launched on 1 March 2024 may be the answer.
The new OPTS is an initiative by the King’s and Lord Treasurer’s Remembrancer (KLTR) to help address the issues relating to ‘ownerless’ buildings or land, which can often blight a local community or lie abandoned for many years before being given a new lease of life. The aim of the OPTS is to make it easier for public bodies, council’s and community bodies to acquire such ‘ownerless’ assets for sustainable use for the benefit of the wider community.
The benefits for local communities
Through using the OPTS process, assets may be transferred at cost value, and if so, the purchaser only needs to cover the KLTR’s external costs. Alternatively, the transfer may be at a nominal value. This instantly makes the OPTS a very attractive option for community bodies that have large reserves of capital and should help speed up the process by not having to apply for grant funding for acquisition costs. However, the KLTR is likely to require a purchaser to enter into a clawback agreement which will be triggered only if the property is sold on for commercial development. A clawback agreement will require the purchaser to pay back all or some of the value of the property to the KLTR and is usually supported by a Standard Security (much like a mortgage agreement) to provide security that the terms of the clawback agreement are complied with.
There are currently 3 main ways in which communities can benefit from the OPTS process:
- Directly approaching the KLTR in relation to an ownerless property (after carrying out investigation to ensure the property is in fact ownerless. The KLTR has a specific OPTS Application Form available online that is to be submitted;
- Responding to an OPTS opportunity when notified by the KLTR; or
- Utilising the OPTS fast-track process.
In general, the KLTR will offer the property to public bodies for first refusal, then to the local council followed by other community bodies (in that order). It is worth considering whether a community body could work with a public body or local council to ‘claim’ a suitable property at this stage, with it being transferred to the public body/council in the first instance and then on to the community body. If a community body is using the fast-track process and the relevant public bodies have already confirmed they do not wish to take ownership of the property, the KLTR is likely to skip this stage and look to transfer the Property directly to the community body.
Whilst the OPTS provides additional opportunities for communities to bring abandoned assets back into use for community benefit, the legal process is complex. The community body will need to show that its constitution is sufficient and demonstrate that the transfer will be in the public interest. It should also be noted that some property is excluded from the OPTS process, such as private garden ground, small ‘ransom strips’, roads/common footpaths.
Should you wish to discuss the OPTS process further, please get in touch with Kevin Sturgeon.
Read more on the key considerations when acquiring property for Charities and community bodies.
