Charities Act 2022 – Charity land

Some of the anticipated changes for charities dealing with land, as brought about by the Charities Act 2022, have now been brought into force. In combination with The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023, the provisions will impact the process that charity trustees must follow in connection with disposing of land.

What has changed?

If a charity is disposing of land it must comply with the requirements of the Charities Act.  For a lot of disposals, a charity requires advice under section 119 of the Act.  The Regulations broaden who can be a “designated adviser” for the purposes of section 119 and simplify the requirements for designated advisers’ reports. The new provisions also bring other relevant changes into play, but we still await some provisions of the Act affecting charity land to come into force later in the year.

What are the implications of the changes?

This gives charities greater options in selecting an adviser to provide the requisite advice in relation to a proposed disposal and may sometimes lead to a more cost-effective route to disposal. Trustees will, however, need to be satisfied that they have selected the best type of adviser for the job, which will include ensuring that the adviser has the appropriate qualification and is covered by an adequate insurance policy.    

Additionally, the requirements regarding the report that the adviser provides are being simplified.  The report will need to include:

(a)        the value of the relevant land;

(b)        any steps which could be taken to enhance that value;

(c)        whether and, if so, how the relevant land should be marketed;

(d)        anything else which could be done to ensure that the terms on which the disposition is made are the best that can reasonably be obtained for the charity; and

(e)        any other matters which the adviser believes should be drawn to the attention of the charity trustees. 

The Regulations include transitional arrangements which will assist where reports were commissioned before the Regulations came into force.

The  Charity Commission has prepared updated guidance to reflect the changes, available on the Charity Commission’s information page - https://www.gov.uk/guidance/charities-act-2022-guidance-for-charities.”