Teaching points: converting schools to homes

Posted: 03/10/2023

The redevelopment of former schools into residential units presents an opportunity to repurpose unused property into housing. This was already an opportunity that some developers were taking, but given recent headlines on RAAC (reinforced autoclaved aerated concrete) and the temporary closures it has led to, some schools may have no choice but to consider closing. While the cost to those running the school for bringing it back up to a standard for use might not be attainable, the works that can be done to these buildings or the complete demolition to make the site into residential units may still be financially viable.

RAAC

RAAC is, in layman’s terms, a lightweight bubble of concrete that was used from the 1950s to the 1980s because it was lighter, cost less and naturally has good fire resistance properties. The issue is that its lifespan should have already run out based on the dates given above, as experts agree that this should typically be 30 years from initial construction. By that maths, the schools which still have it in use are using it between five and 40 years after it has reached its natural expiry point and should have it replaced.

There are thought to be around 15,000 schools built during this period, being entirely new schools and the replacing of old existing schools, as well as repairs and extensions to other schools. Schools are, at the time of writing, being told that the current government’s policy is that it will pay for the emergency mitigation work required in schools in terms of alternative locations and transport to these alternative spaces. There are, however, mixed messages over where the funds will come from to actually complete the works. If these funds do have to come from local authorities or the schools themselves, this may lead to further permanent school closures. Some will think back to the issues with asbestos over the last century and how even now there is believed to be asbestos in 81% of schools in England and wonder if RAAC is a problem that will be dealt with quickly.

An opportunity for development?

To some developers, these schools will seem like an opportunity for development, given that the works to build new units would factor in complete demolition of the existing building in any costing exercise. As such, the cost of replacing the RAAC will not be relevant. However, developers (as well as potential buyers of the units once developed, including registered providers) must navigate potential legal issues, particularly in light of the Reverter of Sites Act 1987.

Legal issues – the 1987 Act

There are four crucial considerations that people with a potential interest in the land should keep in mind when undertaking the redevelopment of a school into residential units, ensuring compliance with the 1987 Act.

Understanding the reverter clause
Central to the 1987 Act is the reverter clause implied by it into the original conveyance of the school’s land if the land was originally donated for use as a school. Developers must gain a comprehensive understanding of this clause and its implications in order that they can avoid additional or wasted costs. It stipulates that if the land ceases to be used for educational purposes, it will automatically revert to its original owner or their successors (most likely their successors, given the time that will have passed) and, where the closure occurs after 17 August 1975, the property is held on trust for such persons (ie even if nobody comes forward, the registered proprietors at the Land Registry will not be the real owner but only holding the land for the person who should really be entitled to it).

To avoid triggering the reverter clause, the property’s redevelopment into residential units must be conducted in a manner that complies with the 1987 Act. Schools where the use ceased prior to 17 August 1975 will not be subject to the same restrictions as the previous acts (the School Sites Acts) would apply and the person that could potentially claim title would be time barred (apart from in rare circumstances not covered here). Schools that changed use pre-1975 are of course going to be less relevant as it is likely the site will not have sat empty all that time and as such will not be being considered for development.

Continuity of educational use
To comply with the 1987 Act and prevent the reversion of the property, developers should consider maintaining the continuity of educational use during and after the redevelopment process. One possible approach includes repurposing parts of the former school for educational or community use alongside the residential units to be developed. The other option is to make sure the proceeds of the sale of the site are used for the current owners to purchase another school or another site for a school to be developed, therefore continuing the continuity of the gift (ie the intention of the original gift for providing education will still be satisfied). Striking a balance between preserving the educational legacy and creating housing solutions can be a viable strategy if both of the above are considered.

Conducting in-depth due diligence
Thorough due diligence is essential before initiating any project. Developers must investigate the property’s history and ascertain whether the 1987 Act applies. This includes examining the title deeds and any previous conveyances related to educational purposes. A detailed due diligence process will help identify any potential legal constraints and enable developers to take necessary steps to ensure compliance. This includes where the site is not being used as a school currently and where previous sellers and developers have ignored the 1987 Act. It may be that all possible legal due diligence will not reveal the original basis of the site being transformed into a school due to lost records and/or deeds and as such there may be an inherent risk that a party with the benefit of the implied clause will come forward. If there is any doubt, then it may be appropriate to consider indemnity insurance policies. However, these may not be applicable if the records indicate that the 1987 Act does apply to the school.

Engaging with local authorities and community
Redeveloping a former school into residential units often requires specific planning permissions and community support. Engaging with local authorities and the community early in the process is crucial to address any concerns or opposition. Demonstrating how the project will benefit the community through the provision of housing while respecting the educational legacy of the site can foster positive relationships and facilitate the approval process.

In summary

Redeveloping a school into residential units offers a chance to provide much-needed housing solutions and, given the current issues for some schools with RAAC, this will prevent sites from sitting empty and unused. As highlighted, it does not necessarily mean that the existence of a school in the area needs to cease as it may be that reinvestment is required to comply with the 1987 Act. However, careful consideration of the act will be needed. Understanding the act, ensuring continuity of educational use, thorough due diligence and engaging with local authorities and the community are critical for a successful project.
By navigating the 1987 Act and adhering to these considerations, developers can transform former schools into successful residential units that leave an educational legacy while meeting the housing needs of the community. Non-compliance can lead to the land and/or units having little or no value and being non-chargeable.

This article was first published in Estates Gazette in September 2023. 

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