Can a school without a commercial transfer agreement (CTA) be turned into an academy? Helen Snow and Sophie Thring discuss issues that local authorities oppose the contract. In cases where the school is part of a contract for other schools, the position is more complex and, as such, it may be necessary to award or vary the part of the contract applicable to the new school. If a well-maintained school is converted into an academy status with a TOCA, it must therefore enter into a new agreement with the third party. The risk of not doing so, or an Academy Trust that claims to grant a TOCA, is that a lease is granted accidentally with all the security that prevents the Academy Trust from terminating the agreement and restoring ownership of that part of the school. Therefore, it is important that schools attract the existence of OCD to their lawyers when they convert, and to Academy Trusts, to ensure that academies do not reuse old TOCA agreements after conversion. There is no doubt that the absence of an ATC will likely make the transformation process more complex and require the parties to conduct a thorough due diligence process and ultimately present an economic view of the risk. A CTA provides a one-stop shop for transfer and provides security and clarity for all parties involved. The absence of the CTA requires that each asset and contract be subject to separate review and treatment in preparation for the changeover to the euro. It will be a much longer and riskier process. In order to circumvent the resulting problems, the governing body of a maintenance school has the legal right to control the occupation and use of the school land, regardless of the owner. In addition, an governing body is able to transfer legal control from a TOCA to a third party. There is no direct equivalent of a TOCA for academy trusts.
This is because the fomentary rules for academy trusts are different from those of teaching schools. The Akademie-Treuhandgesellschaft is the body responsible for monitoring the use and occupation of school premises, but, unlike managed schools, the Akademie-Treuhandgesellschaft will generally hold either ownership or a long lease on school grounds (there is a small exception since former voluntary schools can still occupy land held by former administrators, which is partly governed by a separate document). Since the Academy Trust is generally tolerated by either an owner or a long lease, it is not necessary that control of the use and occupation of the land be granted by law and no legal control is granted, so that no legal control can be transferred to a third party. Consideration should also be given to the transfer of contracts such as service level agreements to ensure that the Academy fully inherits contracts, i.e. rights, benefits and commitments. In the absence of a CTA, the parties must perform due diligence to identify the contracts to be transferred, ensure that those contracts can be transferred, and take all necessary steps to obtain the appropriate agreement for the transfer of the contracts.