We have recently advised a charitable foundation on the disposal of a small area of land. The Charities Act 2022 contains restrictions on charities disposing of and mortgaging land, and makes professional assistance both important and necessary.
For example, say a charity wants to dispose of land the entirety of which is currently held either beneficially or solely for the charity’s own benefit. In this instance, advice must be sought and provided in the form of a report in respect of the disposal.
But the charity cannot draft this report itself as the Act stipulates that such a report must be prepared by a designated advisor. (In the recent 2022 revision of the Charities Act, a qualified surveyor is classed as a suitable designated advisor.)
What should be covered in a report for a charitable land disposal?
The content of the advisor’s report should consider:
- The parties
- A description of the land
- The land’s planning potential
- Alternative uses
- The land’s value and how to maximise value
- Advertising and marketing the land
- All other reasonable steps that could be taken to maximise a successful disposal
- Any conflicts of interest
- Any other prudent matters that the trustees should be aware of
- Confirmation of the surveyor’s appropriate experience and their expertise to advise the charity.
Another requirement is that contracts for disposals or mortgages of charity land must include a statement by the charity’s trustees confirming compliance with Part 7 of the Charities Act. The statement will need to refer to and rely on the report, underlining the importance of commissioning it from an expert familiar with this specialist type of work.
AssetSphere are well versed in navigating charitable land valuations and disposals, and with highly qualified chartered surveyors on our team we are perfectly placed to help.