Charities Act 2022: key points on charity land

11th May 2022

The Charities Bill 2021-2022 received Royal Assent on 24 February 2022, becoming the Charities Act 2022 (the Act) which will be implemented in the next year and a half.

The Act simplifies the law relating to dispositions of charity land by removing several burdensome statutory requirements – the overall aim being to relax the restrictions on disposals to enable charities to save time and expense.

Key points:

The requirement for a charity to obtain a report from a RICS qualified Surveyor which sets out in detail several factors relating to the property and the transaction has been changed. The Act now allows charities to obtain advice from a greater range of advisors rather than being restricted to using only an RICS qualified surveyor. This now includes advice from the National Association of Estate Agents and a fellow of the Central Association of Agricultural Valuers. In appropriate circumstances where the charity has a suitably qualified trustee on its board of trustees, then that trustee could provide the advice without needing to seek external input.

The actual advice required to be obtained in advance of a charity disposition is simplified to cover the following:

1. The adviser’s opinion as to the property’s market value and any work that could be done to improve the sale price;

2. The degree of marketing suitable for the property and any other information that is relevant.

The automatic statutory requirement to advertise a proposed disposition by a charity referred to in the advice is removed and whilst the charity must consider the advice provided, there is no longer a statutory requirement to follow that advice.

The protection afforded to purchasers who acquire land from charities is amended. A contract for the sale of land by a charity should include a statement confirming that the trustees of the charity have obtained and considered the necessary advice given in respect of the transaction or the Court or Charity Commission has authorised the transaction. This statement must also be included in the actual transfer deed of the property to the purchaser. As is currently the case with the statement in the actual transfer, the same statement in the contract for sale is now conclusively presumed to be true in favour of the purchaser enforcing the contract. In the event that the relevant statement is omitted from the contract for sale then the contract remains enforceable by a purchaser who has entered into the contract in good faith as if the statement that the trustees have complied with their statutory requirements was included. Accordingly, a charity cannot rely on its failure to comply with its statutory requirements in relation to the sale of charity land in order to avoid completing a contract for sale.

The Charity Commission will keep charities updated as the relevant provisions come into force.

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