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Charities must comply with certain legal requirements before they dispose of charity land. Disposal can include selling, transferring or leasing charity land. The Act simplifies some of these legal requirements that applied previously.

The changes include widening the category of ‘designated advisers’ who can provide charities with advice on certain disposals. Whereas this could previously only be provided by an RICS qualified Chartered Surveyor, it can now also be provided by a Fellow of the Central Association of Agricultural Valuers or a Member of NAEA Propertymark (the professional membership scheme for estate agents). The advisor can also be a qualified (as above) charity trustee, officer or employee who has experience in the type of property and in the location concerned. However, in each case, the designated advisor has to confirm that they are acting exclusively for the charity and have no conflicts of interest. This can make such advice cheaper and more specific depending on the nature of the property, but depending on the complexity of the disposal, trustees would be well advised to continue to appoint RICS qualified surveyors to prepare the report on a risk management basis. Trustees will continue to have an obligation to select persons reasonably believed to have adequate experience and ability in providing such advice.

The designated advisor’s report is produced to confirm to the Trustees that the terms of the sale are the best for the charity at the time of the sale or transfer. While a valuation is part of that advice, the report also has to make recommendations on how the property should be marketed, whether it could be sold in separate lots to achieve a better result, and whether or not the Charity should undertake improvements or repairs prior to marketing. The report should therefore be commissioned as soon as a decision to sell is made and before any marketing commences. However, the charity is no longer legally obliged to adhere to the designated advisor’s marketing advice, although any departure from their recommendations must be justified and documented. If the advice is to conclude a sale without prior marketing, the report must state the reasons and why, in the advisor’s opinion, this would give a better result.

Other than the disposal of property by way of a lease for less than 7 years (unless for a premium), charities do not need to obtain an order or designated advisor’s report if the disposal is to another charity. However, this exception only applies where the acquiring charity has the same aims and objects as your charity.

As was previously the case, if no report is obtained or it is not sufficient in content, it is possible that a transaction is null and void and the contract unenforceable. This is a complex area of law and charities should check with their solicitor before making any decisions.