We have already seen several changes that have come into force last year which relate to land owned by charities.
A third stage of the implementation of the Charities Act 2022 is due in March 2024.
The new provisions include a requirement for an amended statement to be included for disposals and mortgages obtained by charities, certification requirements for trustees and regulations on new mortgages by liquidators, receivers, mortgagees or administrators.
At present, there is no requirement for charities involved in land disposals to obtain advice or a report when disposing of land to other charities at an undervalue. The change will introduce charities having the need to obtain a Designated Advisers Report unless the transfer of land is between charities and is for nil consideration.
Under the new requirements, there is a significant change regarding the disposal of charity land. Liquidators, receivers, mortgagees or administrators will not be obliged to adhere to the specific rules outlined in the Act for disposing of charity land. This exemption is in place due to the recognition that those individuals already have a professional duty when it comes to disposing of land assets. Their role requires them to act in the best interests of the charity and its stakeholders, ensuring that any asset disposals are carried out with due diligence and transparency.
Therefore, by exempting those individuals from the requirements outlined in the Charities Act 2022 concerning charity land disposal, the legislation acknowledges and respects the professional duty and expertise these individuals already bring to the table. This change aims to streamline processes and empower professionals to fulfil their duties effectively while upholding the integrity and accountability expected in managing charity assets.
In addition to the above, the Charities Act 2022 will mandate that charities must include a specific statement in any contract for disposition of charity land. This statement is required to confirm that the disposition has either been sanctioned by the Court or the Charity Commission, or that the charity possesses the necessary authority under its trusts to carry out the disposition. Furthermore, the statement must affirm that all relevant laws governing such dispositions have been diligently complied with.
Obtaining legal advice at an early stage will mean that the correct level of due diligence is carried out at the earliest possible stage to avoid delays and issues further down the line.
Should you wish to discuss anything further, please contact either Harjot Grewal or any member of our Commercial Property team who will be happy to assist.
