Please note that this News item is not maintained, and reflects the law as at the date of publication or update.
Charities in England and Wales are classified into two main types, ‘exempt charities’ which are not subject to the Charity Commission’s supervision, and ‘non-exempt charities’ which include registered and excepted charities that are regulated by the Charity Commission. The majority of charities in England and Wales are non-exempt charities which are subject to the supervision of the Charity Commission.
The Charities Act 2022 (the “2022 Act”) amended and supplemented the provisions of the Charities Act 2011. It introduced several updates to the restrictions on charities in respect of property, particularly concerning the disposition of charity land. These changes seek to refine and update the existing legal framework and give charity trustees greater flexibility when managing property transactions. At the same time, they ensure that trustees continue to act in their charity’s best interests.
Key Changes to Property Transactions
Charities must carefully consider various legal and procedural requirements in property transactions, whether buying, leasing, mortgaging or disposing of property. One of the most significant changes introduced by the 2022 Act is the requirement for charity trustees to obtain advice from a ‘Designated Adviser’. This replaces the previous requirement for a report under the Charities (Qualified Surveyors’ Reports) Regulations 1992.
The 2022 Act also allows charities to grant short-term tenancies of one year or less for employees to occupy a property as a home, provided certain conditions are met.
In addition, the restrictions on disposing of charity land now apply only where the charity holds the entire interest in the land for its own benefit or on trust solely for the charity.
Why Compliance Remains Important
The 2022 Act introduced several user-friendly changes aimed at simplifying the legal framework for charities, particularly in relation to property transactions. However, despite these reforms, the law governing charity property remains intricate, and charities must exercise caution to ensure compliance with the statutory requirements.
The amendments introduced by the 2022 Act aim to address some of the ambiguities and procedural challenges that previously existed. These changes are designed to provide greater certainty for third parties dealing with charity property. However, the complexity of these provisions underscores the importance of obtaining expert legal advice to navigate the regulatory landscape effectively and to avoid unintended consequences.
Seeking Legal Advice
Given the potential for legal pitfalls, charities are strongly advised to seek professional legal guidance at the earliest opportunity when entering into a property transaction. This should ensure that all statutory requirements are met, safeguarding the charity’s interests and maintaining public trust in its operations.
If you are a charity and are thinking about entering into a property transaction, please get in touch so we can advise you on what steps need to be taken to ensure you do not fall foul of the Charities Acts.
See what our clients say:-
