Use it or lose it

Local authorities looking to sell off assets linked to schools or public facilities should be aware that trying to change the purpose of land could result in it being taken back by estate. Michael Fahy explains how reverter clauses work

02 Aug 2010

With the existing prevailing chilly economic wind about to drop several degrees, local authorities will be subject to the temptation to raise additional funds from the disposal of ‘surplus’ assets.

Should those assets include any land linked to schools or facilities such as libraries, alarm bells should ring loudly in advisers’ ears in case there is a reverter clause lurking in the background. This provides that should the land not be used for the purposes for which it was given – for example, a school or library – the land must revert back to the original owner or its successor-in-title.

While these clauses are not especially common, there are lots of pieces of land subject to reverter clauses and, if they apply, they mu...

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