telephone: 0113 244 6100
Charities and not-for-profit organisations face most of the same issues as individuals and trustees in relation to their commercial property and rural property transactions, but they have a range of specific requirements as well.
For most charities disposing of land in England and Wales, the requirements of the Charities Act 1993 will need to be observed. If the disposal is to a person connected to the charity an Order of the Charity Commission is necessary but, in most other cases, it is possible for the trustees to follow the prescribed procedure to satisfy themselves that the terms of the disposal are the best reasonably obtainable. In both cases, unless the disposal is a lease for up to seven years, a report satisfying the Charities (Qualified Surveyors' Reports) Regulations 1992 will be needed. As this surveyor's report must include advice on whether to repair or divide the property as well as how best to advertise the disposal, it is designed to be the first step of any proposed disposal. It should be actioned at the outset.
Church property is usually subject to these requirements, either under the Charities Act (e.g. for land managed by a parochial church council) or under the similar provisions introduced by the General Synod in 2000.
Registered social landlords need to obtain the consent of the Housing Corporation to any disposal.
The Charities Act does not prescribe a similar regime for a charity acquiring land by transfer or lease. Trustees nevertheless have their general duty to act reasonably and prudently within their powers and in the best interests of the charity. A welcome concession for charities acquiring land is full exemption from stamp duty land tax.
Trustees can find themselves personally liable for a range of obligations: with care it is often possible to limit trustees’ personal liability to the value of the trust assets.