Katja Wigham, partner in Blandy & Blandy’s commercial property team, discusses the implementation of the Charities Act 2022.
The Charities Bill 2022 received Royal Assent on February 24, 2022 with the hard work now starting for the gradual implementation of its provisions by the Charity Commission. The Act will introduce various changes including to the way in which a charity can dispose of its property, making it more straightforward.
Currently, a charity wishing to dispose of a property (the meaning of disposal is wide and includes granting easements and releasing the benefit of restrictive covenants) as well as sales, leases and charges is subject to various restrictions in the Charities Act 2011 including the need to obtain reports from professionals such as surveyors or accountants and the need to advertise the disposition before the trustees can make the disposal.
The purpose of the restrictions is to protect charities from imprudent decisions which would not be in the best interests of the charity and to ensure they obtain best terms before disposing of land. However, complying with the requirements can be costly and will almost certainly delay a transaction.
The amendments will reduce the occasions when a report is required meaning that a charity acting as a nominee or in trust for another person will not be subject to the restrictions. It also changes the requirement for a report to be from a qualified surveyor to a designated adviser (meaning that qualified trustees, officers and employees may be able to provide the report or advice not just members of the Royal Institution of Chartered Surveyors) and removes the need for advertising.
However, the required statements that a charity has complied with the requirement of the Charities Act will now have to be included in a contract for the disposition or mortgage as well as in the document which effects the disposal such as a lease, transfer deed or mortgage.
Disposals should therefore be more streamlined but charities will still need to make sure that they seek early advice to comply with the new requirements.
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