(1)Any mortgage of land held by or in trust for a charity shall state—
(a)that the land is held by or in trust for a charity,
(b)whether the charity is an exempt charity and whether the mortgage is one falling within subsection (5) of section 38 above, and
(c)if it is not an exempt charity and the mortgage is not one falling within that subsection, that the mortgage is one to which the restrictions imposed by that section apply;
and where the mortgage will be a registered disposition any such statement shall be in such form as may be prescribed.
[F1(1A)Where any such mortgage will be one falling within section 123(2) of the Land Registration Act 1925—
(a)the statement required by subsection (1) above shall be in such form as may be prescribed; and
(b)if the charity is not an exempt charity, the mortgage shall also contain a statement, in such form as may be prescribed, that the restrictions on disposition imposed by section 36 above apply to the land (subject to subsection (9) of that section).
(1B)Where—
(a)an application is duly made for registration of a person’s title to land in connection with such a mortgage as is mentioned in subsection (1A) above, and
(b)the mortgage contains statements complying with subsections (1) and (1A) above, and
(c)the charity is not an exempt charity,
the registrar shall enter in the register, in respect of the land, a restriction in such form as may be prescribed; and section 37(9) above shall apply in relation to any such restriction as it applies in relation to one entered in pursuance of section 37(8).]
(2)Where subsection (1) or (2) of section 38 above applies to any mortgage of land held by or in trust for a charity, the charity trustees shall certify in the mortgage—
(a)(where subsection (1) of that section applies) that the mortgage has been sanctioned by an order of the court or of the Commissioners (as the case may be), or
(b)(where subsection (2) of that section applies) that the charity trustees have power under the trusts of the charity to grant the mortgage, and that they have obtained and considered such advice as is mentioned in that subsection.
(3)Where subsection (2) above has been complied with in relation to any mortgage, then in favour of a person who (whether under the mortgage or afterwards) acquires an interest in the land in question for money or money’s worth, it shall be conclusively presumed that the facts were as stated in the certificate.
(4)Where—
(a)subsection (1) or (2) of section 38 above applies to any mortgage of land held by or in trust for a charity, but
(b)subsection (2) above has not been complied with in relation to the mortgage,
then in favour of a person who (whether under the mortgage or afterwards) in good faith acquires an interest in the land for money or money’s worth, the mortgage shall be valid whether or not—
(i)the mortgage has been sanctioned by an order of the court or of the Commissioners, or
(ii)the charity trustees have power under the trusts of the charity to grant the mortgage and have obtained and considered such advice as is mentioned in subsection (2) of that section.
F2(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)In this section—
“mortgage” includes a charge, and “mortgagee” shall be construed accordingly;
“land” means land in England or Wales;
[F3and subsections (1) to (1B) above shall be construed as one with the Land Registration Act 1925.]
Textual Amendments
F1S. 39(1A)(1B) inserted (1.4.1998) by 1997 c. 2, s. 4(1), Sch. 1 Pt. I para. 6(2); S.I. 1997/3036, art. 2(b)
F2S. 39(5) repealed (1.1.1997) by 1996 c. 47, s.,25(2), Sch. 4 (with s. 24(2), 25(3)(4)(5); S.I. 1996/2974, art. 2
F3Words in s. 39(6) substituted (1.4.1998) by 1997 c. 2, s. 4(1), Sch. 1 Pt.I para. 6(3); by S.I. 1997/3036, art. 2(b)