In February 2022, the Charities Act 2022, formerly known as the Charities Bill, received Royal Assent, marking a significant milestone in charity law reform. Recognising the burdensome administrative requirements imposed on charities, the Act aims to alleviate these challenges and empower charities to focus more on their charitable missions.
One of the Act's key objectives is to simplify the process of managing charity property transactions, addressing concerns raised in the Law Commission's 2017 report on technical issues in charity law. By implementing the Commission's recommendations, the Act introduces greater flexibility and efficiency into the disposal of charity land.
Under the Act, charities benefit from enhanced flexibility in obtaining advice regarding property transactions. The requirements for advisory services, including who can provide advice, the scope of advice, and advertising obligations, have been revised to provide charities with more autonomy in decision-making. While this flexibility streamlines the process for experienced trustees, it may present challenges for those less familiar with charity property management.
Overall, the Charities Act 2022 represents a positive step forward in reducing the administrative burden on charities. By simplifying property management processes, the Act enables charities to allocate more time and resources towards advancing their charitable objectives, ultimately fostering a more efficient and impactful charitable sector.
Advisory Expansion and Simplification under the Charities Act 2022
- Expanded Advisory Pool: The Charities Act 2022 broadens the category of advisers who can provide guidance to charities on land disposals, replacing the requirement for a ‘qualified surveyor’ with a ‘designated adviser’. This includes advisers from organisations like The National Association of Estate Agents and The Central Association of Agricultural Valuers.
- In-House Expertise: Additionally, the Act permits charity trustees, officers, and qualified employees to offer advice within their professional capacity.
- Trustee Criteria: Trustees are urged to ensure that designated advisers meet specific criteria, including appropriate qualifications, professional regulation, and suitable professional indemnity insurance.
- Revised Advisory Scope: The Act streamlines the advisory process by focusing on essential aspects such as land valuation, strategies for enhancing value, marketing recommendations, negotiation tactics, and any other pertinent matters identified by the adviser.
- Advertising Requirements: Notably, the Act eliminates the need for trustees to advertise proposed dispositions as previously advised, providing greater flexibility in transaction execution.
- Charity-to-Charity Transactions: The Act addresses the exclusion of charity-to-charity transactions from certain regulatory aspects, acknowledging scenarios where financial considerations are relevant, such as social investments using property.
By modernising advisory practices and simplifying transactional requirements, the Charities Act 2022 aims to facilitate more efficient and effective land disposals for charitable organisations.
Further Details
If you are seeking support with managing your charity’s property transactions, please contact Mark Smith for further details:
Mark Smith BSc (Hons) MRICS
RICS Registered Valuer
Director – Valuation Advisory
M: 07796 825618
