Charities Act 2022 – changes to the regime for disposals of land

June 20, 2023

Charities Act 2022 – changes to the regime for disposals of land

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By Oliver Morris

The Charities Act 2011 sets out stringent processes to follow when a charity is looking to dispose of a property, which includes when they are granting a lease. The Charities Act 2022 has recently reformed the previous regime, by trying to reduce the bureaucracy whilst retaining the protections of the regime.

We have highlighted below some of the most important requirements and changes to them which may have an impact on a charity when they are disposing of land.

1. Dispositions of land other than leases of 7 years or less

Previous requirements

This category of disposal covers most disposals by a charity. The requirements included obtaining a written report, which includes prescribed information, from a qualified surveyor who is a fellow or professional associate of RICS who has experience of dealing with this type of land. It is also a requirement that the disposal is to be advertised as recommended in the written surveyors’ report; and that the trustees of the charity decide they are satisfied that the terms of the proposed disposition are the best that can reasonably be obtained for the charity.

Changes

The main changes made to these requirements are:

• The person who can provide the written report has been widened to include Fellows of the Central Association of Agricultural Valuers and Members of NAEA Propertymark (the professional membership scheme for estate agents); and

• A disposal no longer needs to be advertised as per the report.

2. Grant of a lease of 7 years or less

Previous requirements

The requirements to be met before granting a lease of 7 years are less onerous than for other disposals. They include:

• The charity is to obtain and consider the advice of a person who is reasonably believed to have the ability and experience to do so in relation to the proposed disposition (this does not need to be in writing or provided by a qualified surveyor); and
• The charity trustees need to satisfy themselves that the terms of the proposed disposition are the best that can be reasonably obtained.

Changes

The requirements have been amended so that the pool of people who can provide advice has been widened to include suitably qualified charity trustees, officers and employees, making it easier to obtain the necessary advice.

3. Statements

Previous requirements

When disposing of land, a charity usually needs to make a statement in the document effecting the disposition (e.g. the transfer or lease), confirming the procedures under the legislation have either been followed or do not apply.

Changes

The recent legislation has made it clear that the requirement to provide a statement applies equally to contracts for dispositions of land and not just the transfer or lease.

Summary

These changes add some clarity to the process which a charity needs to follow when disposing of land and hopefully makes it easier for a charity to comply with these requirements.

Are you a charity and do you need advice on disposing of land? Contact our commercial property law team in confidence here or on 02920 829 100 for a free initial call to see how we can help you.