The government is actively encouraging individuals, businesses, charities, and community groups to offer accommodation to Ukrainian refugees. Many almshouse and other charities are wanting to extend their services to support them. However, there are legal and financial challenges to take into consideration. Here we consider how charities may be able to accommodate fleeing Ukrainians and other refugees, and the legal complexities that could arise.
A charity’s legal objects state the organisation’s purposes, which must be exclusively charitable. The current legal objects for many charities may not extend to housing refugees. If this is the case for your charity, it means that you will need to amend your objects before you can apply to home a refugee.
How to amend your governing document
Your governing document may enable you to alter your legal objects yourself or legislation may enable you to do so. Where this is not the case, because you need to make a substantive change, you will then need to apply to the Charity Commission to amend your objects.
Unincorporated charity changing objects
If your charity is unincorporated and has an income of less than £10,000 and no designated land you can change your legal objects yourself, without Commission approval, if:
- it is in the charity’s best interests
- the new purposes are as similar as possible to the purposes they replace and exclusively charitable in their wording.
Changes will come into effect 60 days after a copy of the new governing document is sent to the Commission, although supporting rationale may be required.
If your charity is unincorporated and has an income of more than £10,000 and you need to make a substantive change, you will need consent from the Charity Commission to a “cy-près” application, before any changes are made to the objects.
Incorporated charity changing objects
If your charity is a Charitable Incorporated Organisation (CIO) or a Charitable Company Limited by Guarantee (CLG), making a change to your objects is considered by the Commission to be a
‘regulated alteration’. This means that the prior consent of the Commission must be sought before you can amend your objects.
You will therefore need to make an application to the Commission requesting permission to change the objects. The members of the charity will then need to pass a resolution agreeing to the changes which will need to be filed at the Commission.
If your charity is a CLG you will also need to file this resolution amending the objects at Companies House within 15 days of passing the resolution alongside a copy of the amended articles and a completed CC04 form.
Points to consider in housing a refugee
Charities should weigh up the costs and benefits of housing refugees within existing properties. It could potentially be more cost-effective to raise funds by alternative methods and donate the proceeds raised to specialist refugee charities such as UNICEF, Cac-Sy, Britcits etc.
The Charity Commission has published further advice for charities and trustees on the Ukrainian Humanitarian crisis. Point 3 of the guidance covers amending your legal objects to enable charities to support the crisis.
Should your charity proceed to house refugees, you should consider the following points:
- Direct involvement and support
Refugees are fleeing a traumatic situation and may require ongoing mental health support and guidance. Volunteers will need to be trained to provide this, as well as being able to proactively help refugees settled into their new home.
- Due diligence
Thorough assessment will be required of a charity’s ability to conduct the work it wants to do. Due diligence will also be required of every refugee with regards to their right to reside in the UK.
Make sure that your insurance policy will be sufficient to cover any new or different activities that the charity proposes to undertake.
- Legal advice for being a landlord
You are advised to seek legal advice in relation to offering your properties and putting the necessary agreements in place at short notice. You may need to change your usual terms, particularly if your new tenants occupy the property only on a temporary basis or if (as is likely) they have no security deposit to offer. There will need to be an agreement in place between the charity and the occupants. This agreement should detail the length of stay, the duties of both parties, the permitted use of the property etc. Refugees may also need to seek independent legal advice before entering into such an agreement, particularly as they are dealing with recent trauma and will be deemed vulnerable.
- Tax implications
If the legal objects are amended to allow housing for refugees, this can be deemed a primary purpose of the charity. However, if the legal objects cannot extend to this, housing refugees will be deemed a trading activity, which may interrupt other forms of tax relief income. Charities are advised to take specific advice on this.
- Immigration status
The onus is on landlords to ensure that their tenants or licensees have the correct immigration status to reside in their property. There must be legal evidence of this. Should a landlord fail to complete the adequate checks, and their occupant does not have the correct immigration status, the landlord may face the criminal sanction of a fine. Experienced refugee charities will be able to provide support with mass immigration status checks.
- On-going maintenance
Charities should consider if/how they will continue to support refugees in the future and maintain their wellbeing. This ties in with the refugee’s length of stay. Whilst the government is currently offering grants, this will come to an end, and it will become the charity’s responsibility to raise funds for the benefit of the charity and its users.
Deciding whether to support refugees either through offering a home or financial support is something many charities wish to be able to do. Our advice is to ensure that the risks are correctly assessed, and that legal advice is taken at an early stage in order to protect the charity and its assets as well as those the charity seeks to help.