Guidance

Academies property transactions form 2: buying, exchanging or leasing land or a building

Updated 8 April 2015

This guidance was withdrawn on 10 February 2021

This guidance has been superseded by Submit a school land transaction proposal.

1. Introduction

Academy trusts must seek and obtain explicit and prior approval from the Secretary of State before buying, exchanging or leasing land or a building.

Academies property transactions form 2 is for academies seeking approval to:

• buy land or buildings
• lease land or buildings
• enter an agreement (including an easement or wayleave) giving the academy rights on, under or over land (eg a right of way)
• enter a joint use agreement, not connected with sporting facilities or playing field land, to give pupils the right to use land or building not owned by the academy trust
• enter an option that if exercised will give the academy the right to buy or lease land and/or buildings

It does not apply to other types of leases used for operating equipment, furniture, IT, photocopiers and minibuses.

Please refer to the Academies Financial Handbook for further information.

Whether or not the Secretary of State’s approval is required, the trust must:

• obtain relevant professional advice where appropriate including external auditors where necessary
• justify that the decision represents value for money
• agree internal delegation levels within the trust
• disclose aggregate figures for property transactions as a note to the trust’s annual accounts

2. Information you need to provide

When you submit your application you will be asked to upload:

• a letter confirming that you have authority to act on behalf of the academy
• coloured-up plans of the land you want to acquire or lease. These must of the same quality required by the Land Registry to register the land
• an opinion of the market value to support the rent or price you will pay. This will need to be provided by a registered valuer (a list of registered valuers can be obtained from the Royal Institution of Chartered Surveyors). If the property is a house, you may provide an opinion of the value from one or more local estate agents instead
• heads of terms (the outline of the terms of any sales contract, lease or joint user agreement) or the actual draft sales contract, lease or joint use agreement
• evidence that you have the funds to acquire the property or can afford the lease

It will save you time if you have these documents prepared as electronic files ready to upload before you start completing your application.

If your application is more complex you may also be asked for:

• evidence of planning consent or pre-application advice
• an options appraisal using the net present value template within the form

3. New acquisitions and leases

3.1 Conducting an options appraisal

Your application for consent will normally follow an options appraisal as set out in the Academies Financial Handbook. If you are acquiring additional space to accommodate significantly more pupils or extend the age range agreed in your funding agreement, you will need consent to make a significant change before applying for consent to increase your floor space.

Depending on the level of complexity of the decision and the range of expertise you have within the trust, you may need external independent legal, financial and property advice to support the appraisal process.

Conducting an options appraisal stage will require time before you can make an application.

3.2 Providing a valuation

In the most cases, you need to provide a valuation of the market value for purchases or the market rent for leases. The degree of detail required will be proportionate to the scale, size and value of the transaction. The valuation needs to include costs associated with the responsibilities you will be taking on, any costs for shared use or other payments such as service charges.

In exceptional circumstances, EFA may accept that the cost of obtaining a valuation is disproportionately high. In all other cases, we will only consider your application when you have provided a valuation.

EFA will not normally accept applications seeking consent where the price or rent is higher than the valuation. EFA disregards any notion of the academy being a “special purchaser” that inflates the market price. EFA expects acquisitions from other publicly-funded schools or academies to be at nil or a nominal price.

4. Renewing a lease

To renew a lease, assignment or sub-letting that has a statutory right to renew under the Landlord and Tenant Act, 1954, you should still conduct an options appraisal and provide a valuation but EFA will ask for less information than for new leases.

5. When to expect a decision

EFA will acknowledge your application within 3 working days of receiving your application and provide you with a unique reference number.

Depending on the complexity of the proposal, EFA will confirm the Secretary of State’s decision within 30 working days after receiving all the information needed to consider an application.

EFA may need to ask you to clarify points in the application or request further information.

You must not sign any contract or other agreement until you have received written notification of the Secretary of State’s consent.

6. Completing the form

Before completing the form, you will be asked to create an account to manage your property transaction requests.

Creating an account saves you time as your contact information will be saved to use with future requests.

You will also be able to view a history of your requests.

If you are seeking permission to buy land or a building or to take on a lease of land or a building, please use academy property transactions form 2.