Charities Act Valuations
Any registered charity planning
to sell or lease a property for longer than 7 years needs a qualified Chartered
Surveyor to provide a Charities Act Report.
According to the 2011 Charities
Act, section 119, prior to disposing of the land the trustees must:
- obtain and consider a written report on the
proposed disposition from a qualified Surveyor instructed by the trustees and
acting exclusively for the charity,
- advertise the proposed disposition for such
period and in such manner as is advised in the Surveyor's report (unless it
advises that it would not be in the best interests of the charity to advertise
the proposed disposition), and
- decide that they are satisfied, having
considered the Surveyor's report, that the terms on which the disposition is
proposed to be made are the best that can reasonably be obtained for the
In simpler words, an independent Chartered
Surveyor must provide a report that advises on the most appropriate method of
disposal, whether to carry out works prior to a sale, the current value and how
to best advertise the property. The trustees must then act on the advice to
ensure the best possible outcome for the charity.
Obtaining a Charities Act
Valuation is a requirement of the law designed to ensure that the value of
charity assets is maximised, and trustees do not make unwise decisions, as they
may be personally liable for any losses the charity suffers due to failure to
comply with the requirements of the Charities Act.
It is advised to obtain the
report as early as possible as the Surveyor can provide valuable advice prior
to marketing the property for sale, but it must legally be done before the
charity is contractually obliged to enter the sale. Some more complex
transactions may require more than one report at various points of the process.
If the property is in a poor condition
selling via auction may be the best method of disposal. In this case the report
should provide advice in relation to a reserve price.
Complications can arise with the
disposal of a property subject to an overage clause. The valuer needs to
consider the value of the clause, but this is not straightforward; essentially,
they must provide an opinion at the date of disposal of the planning potential
and the chance of the overage clause being triggered.