Holding trustees and charity (or managing) trustees

Derek McAuley has written a piece in the Unitarian about trustees and I think that he's got his wires a little crossed. I have sent Yvonne Arburrow the following, which others may find useful

Derek McAuley’s explanation of trusteeship was a little confusing so I will try to clarify matters. First we need to understand who and what has a legal identity - people do and incorporated bodies (companies) do. Most congregations are unincorporated associations. Therefore a congregational body does not have a legal identity itself but the individual members hold the rights and duties associated with that congregation. So as an unincorporated association a congregation cannot own anything – as it has no legal identity. Hold these thoughts!

There are two types of trustees that individual people can be –

1. Charity (or managing) trustees; and
2. Holding trustees.

All charities have charity (or managing) trustees but only those who (a) have property; and (b) are unincorporated (that is they are not a company) also need to have either holding trustees and/or custodian trustees. I will describe custodian trustees later but they are similar to holding trustees.

Holding trustees (I suspect that this is what Derek means by building trustees) hold the legal title to the property. They may have other duties which will be found in the governing document – but they may not. Without additional duties their only role is to be owners of the property – it is not their responsibility to maintain or improve it. And if they have no other duties then they have nothing to delegate. Indeed it is the charity (or managing) trustees who can instruct the holding trustees to do things, for example, sell the property.

Best practice suggests that those who are the holding trustees should not also be charity (or managing) trustees but this is not legally binding unless stated in the governing document. However I suspect that many of us carry these dual roles – the main issue is that we always act with integrity.

I would guess that most of our communities have a (managing/congregational) committee rather than a board of trustees. Charity (or managing) trustees are the people on these committees. They have the general control and management of the administration of a charity, regardless of what they are called. In reality anyone who takes an active part in making decisions about the organisation and its property is a trustee whether they have an official title as charity trustee or not. Essentially if you have some power in decision-making then you have to carry some responsibility.

Therefore if you are someone who thinks that they may be a trustee first find out what sort of trustee you are – holding trustee and or charity (or managing) trustee. Look at the governing document and see what responsibilities charity (or managing) and holding trustees have – if holding trustees are not mentioned then they will only own the building and have no additional duties. Then look at the title deed and see who owns your building.

Because ownership is recorded in the title deeds, if holding trustees change there will be a cost involved in changing the deeds. Also if holding trustees do not meet at all there may come a time when there are no holding trustees left or they have moved away and cannot be contacted. You do not want to be in that situation. Therefore many organisations appoint a custodian trustee as well as or instead of holding trustees. A custodian trustee is an incorporated body (a company) - in all but a few specialised cases. For Unitarian congregations this may be a District (if incorporated) or the British and Foreign Unitarian Association (B&FUA). It is less likely that a company will cease to exist so there will always be a least one legal entity which holds title to the building. Some organisations use the Official Custodian, based with the Charity Commission, to hold the title to their property. A custodian trustee has no say in the administration of the charity.