The welcome changes to charity land disposals – what does this mean for trustees?

New regulations have finally come into force this month (June 2023) to make the process of disposing of charitable land more simple and more cost-effective.

Under the Charities Act 2011, no land held by or in trust for a charity could be disposed of without either an order of the court or the Charity Commission unless certain exemptions applied or the statutory procedure of obtaining a qualified surveyors report was followed. The process of obtaining a qualified surveyors report was often time consuming and costly.

Under Section 119 of the Charities Act 2011, trustees considering a disposal were required to:

• obtain and consider a written report on the proposed disposition from a qualified surveyor. The qualified surveyor must be a fellow or professional associate of the Royal Institution of Chartered Surveyors and reasonably believed by the trustees to have ability in, and experience of, the valuation of the land and in the area in question;
• advertise the disposition in whatever manner the surveyor advises;
• decide that they are satisfied, having considered the surveyor’s report, that the terms on which the disposition is proposed to be made are the best that can reasonably be obtained for the charity.

Who can now provide advice?

Under the new Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023 (‘2023 Regulations’) trustees can now choose to obtain their report from a Designated Adviser, who may be one of the following:

• A Fellow or professional associate of the Royal Institution of Chartered Surveyors;
• A Fellow of the Central Association of Agricultural Valuers; or
• A Fellow of the National Association of Estate Agents.

This will give charities more choice in whom they can seek advice from on land disposals.

The new provisions will also allow a suitably qualified charity trustee or employee to give the requisite advice, provided that there is no conflict of interest by them acting in this capacity.

Finally, it is no longer a requirement for trustees to advertise the proposed disposition of land in line with advice received in the old-style ‘qualified surveyor’ reports.

Key actions for trustees

Whilst these are welcome changes for charity trustees, it is still important that trustees familiarise themselves with the statutory requirements for disposing of charitable land and how these apply to their particular disposition. Our Real Estate team is always on hand to guide you through this process.

Other changes regarding land disposals by charities will come into force later in the year- watch this space!