Tips for disposing of charity land

Over recent years we have seen increasing numbers of property sales by religious orders and faith charities. While there can be numerous reasons for selling a property, for religious orders, the main reason relates to a decline in the number of religious within the order and the diversion of their mission away from the UK. As a result, the property is either unsuitable for the remaining members of the order or is no longer crucial to deliver the mission. The tips below are relevant to all faith charities and more broadly.

When disposing of property, be it either land that the charity owns outright (freehold land) or property occupied by the charity on a leasehold basis, there are a number of points to consider:

  • Do you want to dispose of the property all together or is letting it an option?
  • Have you obtained professional advice from a surveyor or agent on the terms of the sale including the price, deposit and other conditions?
  • If you are retaining any adjoining land consider whether you need any rights over the land being sold e.g. access rights, rights to connect into services.
  • Check to see if an Energy Performance Certificate (EPC) needs to be commissioned for the property – most transactions need a certificate showing the energy efficiency of the property (although there are some exceptions for places used for worship or for religious activities and in some cases listed buildings).
  • Discuss with your surveyor or agent whether the property is suitable for development – for example does the property come with lots of land with could be developed or could the property be converted to a different use. If development is possible then it may be necessary to include a clawback or overage provision in the sale. Overage or clawback provisions allow the seller to share in the value of any potential development of the property after it has been sold.
  • Consider whether you want to restrict any future use of the land.
  • If the charity is planning to sell property which it occupies under a lease then check whether any third party consents are needed e.g. consent from the landlord or management company.
  • Ensure that you comply with the requirements of the Charities Act 2011 – this requires a charity to obtain a report from a qualified surveyor before contracts are exchanged to confirm that the terms of the sale are the best that can be reasonably obtained.

We can assist with all types of property disposals as well as any other property related matters.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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