The Charities Act 2011, which came into force on 14 March 2012, merges the Charities Act 1993 with certain other charities legislation.
Whenever a charity sells its land holdings, for example to relocate or to release cash for other projects, the charity trustees will need to be satisfied that any disposal is properly managed, is in the charity’s best interests and that the best price obtainable in the circumstances has been achieved. Amongst the points to consider are whether the charity has the power to dispose of land and whether the transaction envisaged constitutes a “disposal”.
The general rule is that, unless the disposal falls within certain exceptions and certain prescribed procedures are followed, the disposal must be sanctioned by the court or the charity commission. However, as long as the procedures set out in the new Act are followed, charities can dispose of land without such sanction.
The procedures the charity trustees must follow before entering into a contract for sale include:
- Obtaining and considering a written report on the proposed sale/disposition from a qualified surveyor instructed by and acting exclusively for the charity.
- Advertising the proposed disposal for such period and in such manner as the surveyor advises in his report (save where the surveyor advises not to advertise).
- Deciding that they are satisfied having considered the surveyors report (previously referred to as a Section 36 report) that the terms of the proposed sale/disposition are the best that can be reasonably obtained in the circumstances.