From Muckle LLP
If you are at a school that is converting to an Academy or have already done so and share part of your site with third party occupiers, then you should consider formalising any sub-letting.
It may be that you already share part of your school site with third party occupiers. There may be members of your staff living on Canada Goose outlet site, such as a caretaker, or it may be that part of the school site is used by a sports club, a Sure Start Centre or a third party nursery. Pre-conversion, it is likely this was an informal arrangement as many of the parties were under the umbrella of the local authority.
Post-conversion is a different story because the school will be a separate legal entity and entirely separate from the local authority. Academy conversion provides a good opportunity to formalise these arrangements into a formal sub-letting arrangement so that each party knows where they stand. It is also an opportunity to review whether any form of payment or a contribution towards utilities and shared services should be requested from the sub-tenant.
Under the standard form Department for Education academy lease sub-letting is not permitted. This provision can be negotiated on conversion or varied post-conversion by agreement with the local authority. Usually the academy lease will specify a maximum term of years for which a sub-lease can be granted. We have been able to get this as high as 21 years but more commonly it is 10 years. There also may be a requirement to get the landlord's consent which will entail additional cost as the local authority will want their legal fees paid for considering any such application. If you anticipate doing several under-lettings it can be worthwhile to get the consent requirements removed from the academy lease on conversion.
It is important to take legal advice in connection with preparing any proposed sub-lease to ensure that it mirrors the terms of your academy lease and that you do not end up either in breach of the academy lease or of your funding agreement. If sub-letting for commercial purposes it may be a requirement of your charitable status that a subsidiary trading company is set up and the Department for Education would often want to see this in place in order to protect the academy from any potential commercial liabilities.
If you need any help on this or just want to find out more about a query you may have, contact Richard Nixon at Muckle LLP on 0191 211 7924 or email richard.nixon@muckle-llp.com
