Places of Worship (Enfranchisement) Act 1920
A little visited part of the statute books, the Places of Worship (Enfranchisement) Act 1920 conveys a powerful right available to religious groups utilising a property as a place of worship (‘The 1920 Act’). The 1920 Act represents one of the first forms of freehold enfranchisement, which was brought about following the Select Committee report on Town Holdings from 1989 (‘the Report’).
The Report found that a number of ‘non-conformist’ religious groups suffered from having no long-term security of tenure with regards to the places of worship and schools associated with them. As a result, it was felt important that communities were able to achieve long term security in the form of acquiring the permanent right to buy and use property as a place of worship, rather than being dependent on the grant of a long lease by the landlord.
It was found by the Report that the freeholder should have no objection, provided that the freeholder is adequately compensated for the loss of the property, in this case on the payment of a premium.
Rarely used in practice
The 1920 Act has so far been considered only twice in reported cases, on each occasion by the High Court. The fact that these cases were considered 88 years apart illustrates how scarcely used this piece of legislation is.
This may indicate that most are unlikely to come across this niche area within the already specialised area of enfranchisement law. However, the legislation may be applicable in more ways than many would assume.
In a 2015 case, a former supermarket located along a high street in Sheffield was successfully enfranchised by the religious group which held a long lease of the premises.
It could be suggested that 1920 Act was not designed to encapsulate such properties however such arguments are irrelevant; if the building qualifies then it appears that that even a former supermarket is caught by the 1920 Act. The implication is that landlords will need to be aware of this enfranchisement right and the potential loss of the freehold if granting a lease that is caught by the legislation.
Religious groups which could benefit from the liberal application of the 1920 Act should also be aware of this potentially valuable right, even if the building in question is for example a former shop or warehouse is not per se a traditional place of worship.
The 2015 case is a salutary reminder that it is the characteristics of the lease rather than the building, which is important.
Which properties qualify?
The criteria differ from that found within the Leasehold Reform Act 1967 and Leasehold Reform, Housing and Urban Development Act 1993. Unlike these Acts, the physical characteristics of the building is not the determining factor.
For a leaseholder to qualify to buy the freehold:
- The property must be held on a lease granted for more than twenty-one years; and
- The property must be used for the purposes of a religious place of worship.
There are some exceptions which would need to be examined carefully in each case. Once grounds to bring the claim are established a mechanism akin to compulsory purchase will apply and in the absence of agreement between the parties, the Upper Tribunal (Property Chamber) can determine the sum payable to enlarge the interest to freehold.
It is therefore critical to take advice both prior to the grant of a lease which may be caught by the 1920 Act or if there is any doubt as to whether the legislation may apply.
Ricky Coleman is an Associate Solicitor within the Leasehold Enfranchisement Team at Mayo Wynne Baxter LLP email@example.com