Procedures

Signing leases

Signing leases

There are a number of rules relating to the signing of leases that must be observed for  the document  to be fully valid, but there are some helpful alternatives where not all the potential signatories can be located in time.

  • Leases for a term of under three years do not need to be in the form of a deed (or even in writing, but written leases are more certain) and subject to the terms of the  organisation’s constitution, internal procedures and standing orders may be signed (with or without a witness) by any party who is authorised.  This can be useful where directors or trustees will be difficult to locate when a document needs to be signed.  The landlord’s solicitor will need some notice of this form of signature so that the document can be set up for this type of signature.
  • Leases for a term of over three years must be executed as a deed, and shorter leases tend to be in the form of a deed in any event unless particular arrangements are made as above.  If a lease to an organisation for less than three years is not by deed, anyone can sign on behalf of the organisation who has delegated authority to do so.
  • Companies and community benefit societies can execute deeds by the signature of two board members (directors or trustees) or one board member in the presence of a witness.  CIO’s will generally execute by the signature of two trustees, but if they only have one trustee, the signature of that trustee will suffice.  Any of these organisations can execute by the traditional method of using a seal (if they have one) but that method is rarely used nowadays.
  • The trustees of unincorporated charities will generally each have to sign their leases in the presence of a witness.
  • However, charity trustees can avoid the need for all of them to sign the original tenancy and subsequent deeds of transfer by delegating the power to execute such documents, or documents generally, to two or more of their number under Section 333 of the Charities Act 2011.  This authority only relates to the power to execute, i.e. to actually sign, documents that have already been agreed by the charity.  A Section 333 authority can be extremely useful where the documents need to be signed but some or all of the trustees who are to sign the documents are away.
  • Section 333 is not available for use by holding trustees.  If a holding trustee is likely to be absent when a document needs to be signed, they will have to enter into a power of attorney authorising someone else specifically to sign on their behalf.
  • Where trustees have been incorporated under section 251 of the Charities Act they can execute by a simple majority of the charity trustees, under a delegated authority under section 261 (a procedure similar to section 333 above) or by affixing their seal if they have one.
  • Where property is held by the Official Custodian on behalf of a charity, the individual charity trustees must sign documents such as leases.  The Official Custodian does not sign.  The procedure in section 333 can be used to manage the number of signatures required.

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Mr A B Smith
Director