Part 7

Charity land

Restrictions on mortgages of land in England and Wales

Mortgages: required statements, etc.
125
1
Any mortgage of land held by or in trust for a charity must—
a
state that the land is held by or in trust for a charity,
b
state whether the charity is an exempt charity and whether the mortgage is one falling within section 124(9), and
c
if the charity is not an exempt charity and the mortgage is not one falling within section 124(9), include the statement required by subsection (1A).
1A
The statement is—
a
in a case where section 124(1) applies, a statement that the mortgage has been sanctioned by an order of the court or of the Charity Commission, or
b
in a case where section 124(2) applies, a statement that there is power under the trusts of the charity to grant the mortgage and the requirements of section 124(2) have been complied with.
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Where subsection (1)(c) 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 is conclusively presumed that the statement is true.
5
Where subsection (1)(c) applies in relation to a mortgage of land but the statement required by subsection (1A) has not been included in it, 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 is valid even if—
a
the mortgage has not been sanctioned by an order of the court or of the Charity Commission, or
b
there is no power under the trusts of the charity to grant the mortgage or the requirements of section 124(2) have not been complied with in relation to it (or both).
6
Where section 124(7) applies to any mortgage of land held by or in trust for a charity, the charity trustees must certify in relation to any transaction falling within section 124(7) that they have obtained and considered such advice as is mentioned in section 124(7).
7
Where subsection (6) has been complied with in relation to any transaction, then, in favour of a person who (whether under the mortgage or afterwards) has acquired or acquires an interest in the land for money or money's worth, it is conclusively presumed that the facts were as stated in the certificate.
S. 125(1)(1A) substituted for s. 125(1) (7.3.2024) by Charities Act 2022 (c. 6), ss. 23(3)(a), 41(4); S.I. 2024/265, reg. 3, Sch. 1 para. 5 (with reg. 9)
S. 125(5) substituted for s. 125(4)(5) (7.3.2024) by Charities Act 2022 (c. 6), ss. 23(3)(d), 41(4); S.I. 2024/265, reg. 3, Sch. 1 para. 5 (with reg. 9)
S. 125(2) omitted (7.3.2024) by virtue of Charities Act 2022 (c. 6), ss. 23(3)(b), 41(4); S.I. 2024/265, reg. 3, Sch. 1 para. 5 (with reg. 9)
Words in s. 125(3) substituted (7.3.2024) by Charities Act 2022 (c. 6), ss. 23(3)(c)(i), 41(4); S.I. 2024/265, reg. 3, Sch. 1 para. 5 (with reg. 9)
Words in s. 125(3) substituted (7.3.2024) by Charities Act 2022 (c. 6), ss. 23(3)(c)(ii), 41(4); S.I. 2024/265, reg. 3, Sch. 1 para. 5 (with reg. 9)