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If your organisation wants to apply for public funding, such as Lottery funding from Sport England, for any land or building project, you will need to demonstrate that you have or intend to have, security of tenure for the land and/or facilities you want to develop.
Funders want to ensure that their investment will have a sufficiently long-lasting impact, so their criteria often focusses on how long you can stay at your site or facility. The most common things funders like Sport England are likely to look for within your security of tenure documents include:
Does your organisation have the security of tenure?
Funding applications must come from the organisation or individual(s) who have a legal right to use the site or property, via a lease or freehold. If you are not the leaseholder or freeholder, you will either need to obtain a lease or freehold, otherwise the application will need to be submitted by the organisation that owns the land and/or facilities. For example, if you use a school’s playing field and the funding would be for that facility, whoever owns the school’s site would need to be the applicant. Check the documents on the Land Registry website if you are unsure.
Whose name is on the lease or freehold?
The name on the lease or freehold must match the name on your governing documents and funding application. For legal reasons, some organisations won’t be able to hold land in their own name; instead, it will be in the name of their trustees. If this is the case, check that named Trustees are alive and still involved with the organisation. If they are not, your documents need to be updated. If you don’t have a freehold or lease, the organisation or person(s) that holds it must become the applicant.
How long is left on the lease and does this meet the minimum terms for amount of funding applied for?
If you lease the site or facility you want to apply for funding for, funders will need to know how long is left on your lease and if this meets their criteria for investment based on the amount of funding you have applied for. If your lease does not meet the minimum terms you may need to extend your lease to be eligible. Funders typically look for:
- Minimum of a 7-year lease, from the completion date of your project, for awards up to £50,000.
- Minimum of a 10-year lease, from the completion date of your project, for awards of between £50,000 - £99,999.
- Minimum lease requirements for awards of £100,000 or more may vary depending on the funder.
Does the security of tenure provided cover the site that you want to develop?
Funders will want to ensure that the boundaries covered by your security of tenure documents include the land or facility that you want investment for.
Does your lease include any break clauses?
Sometimes leases contain “break clauses” which can allow either the landlord or the tenant to end the lease for one or more reasons, which are agreed when the lease is drawn up, before the end of the lease. Funders need to be reassured that your organisation cannot be removed from the site early, so that their investment will be secure.
Are there any other clauses in the lease that might impact on your security of tenure?
There are several clauses that funders are likely to look out for in a lease that could impact on the security of tenure of a project site, including:
- Scheduled rent reviews, where the landlord can change the rent amount charged. For example, if the rent could increase significantly during the minimum term period, this may affect whether you can afford to stay at the site and your project’s viability.
- Clauses that allow your organisation or the landlord to assign all or part of the property to another party. If this happened, your organisation might no longer be the tenant.
- Clauses that allow any of the property or grounds to be sub-let, either by your organisation or by the landlord. If this happened, your organisation would still be a tenant but would have to share the property.
- Clauses that restrict anything the funder might want to add as a condition of their investment. For example, some funders request a legal charge on the land covered by your lease, which means that they have some say in what happens next if something goes wrong. However, your lease may have a clause disallowing charges, which may need to be reviewed with the landlord or landowner.
- Permitted use clauses, which specify particular uses of the property or grounds which might prevent you using the site or property for the purpose you intended.
DISCLAIMER: This article is provided for general information only. Sport England is not your adviser and any reliance you may place on this is at your own risk. Neither Sport England, nor any contributor to the content of this article, shall be responsible for any loss or damage of any kind, which may arise from your use of or reliance on this article. Care has been taken over the accuracy of the content of this article, but Sport England cannot guarantee that the information is up to date or reflects all relevant legal requirements. The information contained in this article is not organisation specific and may therefore not be suitable for your organisation or club. We recommend that you obtain professional specialist technical and legal advice before taking, or refraining from, any action on the basis of information.