Streamlining charity land disposals: A look at the latest progress under the new regime applying to charities

Why should I read this?

Like organisations in many sectors, charities have been under strain as a result of current economic challenges. Inevitably, as significant landowners, this has led some charities to consider how best to extract value from their estates by selling and leasing land and buildings.

The Charities Act 2011 obliges non-exempt charities to take specified steps before they complete disposals of this nature. This includes obtaining a written report from a qualified surveyor on the proposed transaction which must address a shopping list of points, with a focus on valuation. The recently made, albeit not yet in force, Charities (Dispositions of Land: Designated Advisers and Reports) Regulations will widen the pool of possible advisers that charities considering disposals can turn to and will simplify what must be included in their reports. This will be welcomed by those who regard the current process as unduly long and disproportionate. Charities, and those dealing with charities (for example those buying charities’ land), should be aware of the changing requirements and how this can make it easier for them to operate and best use these estates.

What should I do?

• Keep a watching brief for the coming into force of the new Regulations
• Be aware that charities will have a wider pool of potential advisers to choose from, including fellows of the Central Association of Agricultural Valuers and members of NAEA Propertymark
• Focus on the new report requirements that will come into force with the Regulations. These will include addressing the value of the land, steps that could be taken to enhance its value and if/how the land should be marketed

What else do I need to know?

The new Regulations are part of a drive away from onerous legal requirements and unnecessary red tape, whilst still ensuring that charities are sufficiently regulated, their assets protected and their purposes advanced. Charities will be looking to reduce their outlay so that they can generate maximum value from any transaction so it is essential to increase expertise and awareness of the new possibilities at board level. This will help charities be light on their feet and maximise the benefits of any transactions.