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Real Estate Update: What Schools Don’t Know Can Hurt

23 November 2018

It is common for schools to make available playing fields/sports halls or classrooms outside of school hours. We take a look at a recent case which may facilitate shared use arrangements if carefully drafted.

Classrooms

A business tenant of a building, for example a crèche or pre-school, can acquire a statutory right to a 20 year renewal lease after 5 years’ possession  unless  formally given up . The court may treat a verbal or written licence as a tenancy depending on the nature of the arrangement.

Playing fields

An occupier of a playing field, or typically an all-weather pitch, who has contributed to its improvement can acquire the right to a 99 year lease after 21 years occupation. This term reduces to 12 years if it has neighbouring land used with it. For example, a local sports club with its own facilities uses the school’s playing fields for 12 years after contributing to their improvement.

There has been legal uncertainty as to whether such shared user constitutes “occupation” qualifying a club for a 99 year lease.

Sports clubs will often have  access to grants not available to schools. When contributing to improvement of sports facilities they will require a user commitment of at least 20 years. If so limited, the club will be concerned from the outset that they may be refused a renewal on purely legal grounds, and the school may ultimately be oblivious to the approaching expiration deadline for prevention of occupational rights. 

So, what’s new?

In Board of Management of St Patrick’s School v Eoghan O’Neachtain Ltd [2018] IEHC 128 it was decided that due to the nature of the arrangement between the the school and Eoghan O’Neachtain Ltd, occupation of the school yard fell well short of constituting possession of the premises to the total exclusion of the school. The right of the defendant to occupy the school yard was firmly limited to times when it was not required for use in connection with the primary educational purposes of the school property as a whole. Furthermore, the agreement specifically provided that the days of opening were subject to alteration from time to time to accommodate the wishes of the Board for school purposes. It also provided that should the Board have required the car park for development or some other purpose, it was at liberty to terminate the agreement by the giving one month’s written notice, without obligation to pay compensation.

In essence, the intent of the agreement was to provide a stream of revenue by permitting the defendant to access the yard to operate an intermittent car parking business at times when it was not required for school purposes. The fee paid was in consideration of limited access to the premises, rather than a rent for occupation of the yard to the exclusion of the Board.

Although the case does not deal with sports fields, it suggests that shared use permitted by a school under a well drafted licence may not relinquish “occupation” or “possession” sufficient to trigger statutory renewal rights.

Conclusion

The rationale behind the decision in St Patrick’s case should provide comfort to schools wishing to enter into shared user arrangements of its property.

Schools wishing to provide or renew such shared use should seek legal advice and put in place a carefully drafted agreement.

For more information on shared use permitted by schools, contact a member of our Real Estate team.


The content of this article is provided for information purposes only and does not constitute legal or other advice.

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Real Estate Law
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