Charities Act Valuation: Advising on the Disposal of Charity Owned Property in the Best Interest of The Charity
Under the Charities Act 2011, trustees are required to obtain a written report from a qualified surveyor before disposing of any property. This ensures the charity receives the best possible terms for the transaction, thereby maximising the value of their assets.
A charity approached us after selling the property through an off-market transaction. The property had not been marketed, and the trustees decided to sell based on a fair offer received from the purchaser.
The primary purpose of a Charities Act Valuation is to ascertain the market value of the property. This involves assessing current market conditions, the property’s condition, and comparable transactions in the area. After conducting thorough research and understanding the market, we provided an informed recommendation on the property’s market value.
Typically, we recommend a private treaty sale for properties of this nature, as it offers maximum market exposure and attracts the greatest level of purchaser interest. This approach ensures that the terms of the sale are the best that can reasonably be obtained for the charity. However, in this case, the property’s poor condition led us to determine that its market value would be below the offer accepted by the purchaser.
Given the charity accepted an off-market offer exceeding the anticipated market value, we recommended proceeding with the off-market sale as it was in the best interest of the charity.
This recent Charities Act Valuation project highlights our commitment to providing expert advice and ensuring the best outcomes for our clients. By conducting thorough valuations and understanding market dynamics, we help charities navigate decisions and maximise the value of their assets.
Role of Charity Trustees
Charity trustees play a pivotal role in safeguarding the interests of their registered charity, especially when it comes to property transactions and the disposal of charity land. Under the Charities Act 2011, it is a legal requirement for trustees to obtain a written report from a qualified surveyor—specifically, a member of the Royal Institution of Chartered Surveyors (RICS)—before proceeding with the disposal of any property or leasehold assets with leases longer than seven years. This Section 119 report provides an independent, expert valuation and advises on the most appropriate method of disposal to secure the best price and optimum value for the charity.
Trustees must exercise due diligence in selecting a RICS qualified surveyor with extensive experience in similar valuations, ensuring the surveyor is acting solely on behalf of the charity. The valuation report should be thorough, taking into account current market conditions, the estimated costs of any works prior to sale or lease, and the optimum use of the property asset. By working closely with chartered surveyors, trustees can be confident that the advice they receive is both impartial and in line with the latest regulations and best practices.
Beyond the initial valuation, charity trustees are responsible for ensuring that all property transactions are conducted in a fair and transparent manner, always prioritising the best interest and best value for their charitable organisation. This includes reviewing the surveyor’s recommendations on the most appropriate method of disposal—whether by private treaty, auction, or another route—to achieve the optimum outcome for the charity.
Ongoing support from qualified professionals, such as estate agents, agricultural valuers, and other experts, is essential for trustees to effectively manage their property assets. By seeking expert advice and maintaining compliance with the Charities Act and related regulations, trustees help ensure that their charity’s land and property transactions are conducted with integrity, transparency, and in accordance with the law.
Ultimately, the role of charity trustees is to act in the best interest of their organisation, ensuring that every property disposal is handled with due care, diligence, and a focus on achieving the best possible outcome for the charity and its beneficiaries.
