What should sports clubs consider when constructing new facilities?

Constructing a new building is often one of the most significant legal and financial commitments a small sports club will ever undertake. Whilst the focus is usually on obtaining planning permission, grant funding, finding the right contractor and build specifications, the legal framework within which a project is delivered is just as important. 

Melissa Henderson, solicitor in our construction and engineering team, explains what sports clubs need to think about.

Legal status of the club

A club’s legal status underpins almost every aspect of a construction project. Sports clubs generally operate as an unincorporated association, a company limited by guarantee, a registered charity or a Community Amateur Sports Club (CASC). 

Each of these has slightly different rules on who has authority to enter into contracts, who bears legal liability if something goes wrong, how assets are owned and protected, and the regulatory obligations that apply during the works.

Planning and regulatory compliance

Beyond planning permission, construction projects involve a range of statutory obligations. These include building regulations, health and safety duties, compliance with the Construction (Design and Management) Regulations and environmental requirements. 

Clubs must ensure that responsibility for compliance is clearly allocated between the club, professional advisers and contractors.

Construction contracts and risk allocation

Standard form contracts can be useful, but they are not one-size-fits-all and often require amendment to reflect the club’s circumstances and funding conditions.

In particular, clubs should address  the scope of works and specifications, responsibility for delays and cost overruns, insurance requirements, treatment of variations, termination rights and dispute resolution provisions.

Tax matters, including VAT, should be dealt with clearly within the contract and specialist tax advice obtained where appropriate . 

Funding, grants and contractual alignment

Many sports clubs rely on grant funding to deliver new facilities. Grant conditions frequently impose legal obligations relating to procurement, building use, reporting and community access. These obligations must align with the terms of the building contract and professional appointments.

If grant conditions restrict commercial use or impose community access requirements, these constraints should be reflected in construction contracts to avoid conflicts or future disputes.

Mixed use and future operation

Where a new building will have mixed uses, such as sporting facilities alongside a bar or event space, this should be considered from both a legal and a financial perspective. 

Intended use can affect planning, licensing, insurance, lease arrangements and ongoing compliance obligations.

Clubs should ensure that future operational plans are consistent with planning permissions, funding agreements and contractual commitments made during the construction phase.

Practical legal steps for clubs

Clubs should:

• Confirm their legal structure and authority to enter the contract before the project begins
• Review governing documents
• Appoint appropriate professional advisers under professional appointments
• Use suitable construction contracts that reflect funding and risk
• Ensure that tax issues are properly addressed within the contracts

Constructing new facilities is not just a financial challenge for sports clubs, but a significant legal undertaking. 

Clear governance, air-tight contracts and early professional advice are essential to manage risk, comply with regulatory obligations and ensure the finished facility can be used as intended.

For more information, contact Melissa using [email protected] or 0191 211 7915.