The key provisions of this new phase came into force on 14 June 2023 and are intended to simplify property transactions for charities.
Under the Charities Act 2011, when disposing of charity property, trustees were required to obtain and consider a report by a RICS qualified surveyor that the terms of the transaction are the best that can be reasonably obtained for the charity. This overall process has not changed under the Charities Act 2022, but there are some new provisions aimed at simplifying it:
- Whereas under the Charities Act 2011 trustees had to get advice from a RICS qualified surveyor they now have the option of obtaining a pre-disposal report from a “designated adviser”. This means that suitably experienced charity trustees, officers and employees will also be able to provide a report or advice on the proposed disposition, in addition to RICS qualified surveyors and estate agents.
- The old regulations governing what information a pre-disposal report must contain have been revoked. A new set of regulations, the Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023 are now in force instead. The new regulations simplify the information that should be included in a pre-disposal report, which should help ease the decision-making process for trustees.
- Trustees will no longer have to advertise a proposed disposal of land in such manner as their surveyor advises. This gives trustees some more flexibility over how they choose to dispose of their property. For example, when selling, they could put the property into auction, or sell to a third party without having to advertise it for sale on the open market.
These are welcome changes. Charities now have more choice over who they take their advice from, and the likelihood is that the new regulations will cut down on the administrative costs charities face when disposing of land. In addition the new regulations governing pre-disposal reports replace a set of regulations that are now thirty years old and no longer fit for purpose.
If you are a charity and require further legal advice on land disposal in England and Wales, please get in touch for expert advice and guidance on land disposal transactions.