Charity property law
If a charity is considering selling land or granting a long lease over it, they must ensure that it complies with the requirements of the Charities Act 2011, so that it can demonstrate it has achieved the best price reasonably obtainable.
Our team of charity and social enterprise property specialists help clients with all aspects of their property legal needs, whether they own or rent a property as part of their charity’s operations or are holding it as an investment.
What legal services do we offer?
Our areas of expertise in the field of charity property law include:
- Freehold sales and purchases
- Permanent endowment
- Designated land
- Complying with the Charities Act requirements on disposals and mortgages
- Leasehold interests
- Residential property for charitable purposes
- Statutory notice procedures
- Management agreements
- Charity shops
- Property disputes
Legal requirements for charities disposing of property
Under most circumstances the trustees of a charity seeking to dispose of property, whether by freehold sale or the grant of a lease, will not need permission from the Charity Commission.
They will, however, need to comply with the requirements of the Charities Act 2011 and their own governing document. Trustees contemplating a disposal must, among other things:
- ensure that they have power under the charity’s governing document to sell or grant a lease of the property
- determine that the disposal is in the best interests of the charity
- obtain a written report from a qualified surveyor and market the property in accordance with the surveyor’s recommendations
- ensure that the transaction they agree represents the best deal reasonably obtainable for the charity
- ensure that the disposal documentation contains the statements required by the Charities Act and the Land Registry.
There are slightly different rules which apply to the grant of short leases.
Certain transactions may require prior approval of the Charity Commission including, but not limited to:
- disposals of land which constitutes Permanent Endowment or Designated Land
- disposals which don’t follow the advice of the qualified surveyor
- disposals to someone connected to the charity, such as a trustee, an employee or anyone related to them.
Our team of charity solicitors
There are no specific requirements in the Charities Act relating to the purchase of property by a charity.
However, trustees will be bound by their normal duties to act only in the best interests of the charity and act prudently in their decision making.
Charities may want to borrow money, secured against property, either to fund the initial purchase or to carry out development works. There are separate requirements under the Charities Act relating to mortgages.
Trustees will need to:
- ensure that they have power under the charity’s governing document to borrow money and to secure the borrowing against the charity’s property
- take advice on the terms of the mortgage from someone experienced in financial matters
- be satisfied that the terms of the mortgage are reasonable and that they can afford the repayments.
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Don’t take our word for it…
Moore Barlow provides a comprehensive range of advice for national and international charities. The team largely handles governance, transactional, and structural matters, including areas such as fundraising, mergers, regulatory, property, registration, and employment. Moore Barlow also has expertise in youth charities alongside regularly dealing with the Charity Commission. Another facet to the firm’s practice is handling cross-border charity mandates.
Chambers & Partners
The charities team work hard to get to know their clients and to give a personal service that recognises our own specific needs. We are confident that they will give us accurate, timely and helpful advice in times of crisis as well as more routine needs.
The team has considerable expertise in advising charities, in particular in educational sector. They are unusual in being able to advise on the intersection between charity governance and other issues including employment and safeguarding and so we are confident that they understand the context in which we are operating.
These guys are fun to work with. They give excellent, clear, thorough advice. Just who you need in a crisis (which, let’s face it, is mostly when you call a lawyer). They guide you rather than just present the options. Highly responsive and professional. Seems a good balance of big enough to have specialist capability, small enough to offer personal and really good service.
The charities team are outstanding. There can’t be many law firms where clients actually enjoy having to get in touch. They are responsive, personable and incredibly knowledgeable. Not only do they grasp the issues quickly, but they are solutions focussed. You don’t come away with a range of options which you are left to chose between, but you are expertly guided through those decisions, and end with a clear sense how to progress the problem.
We have been delighted with the service we have received from the charities team at Moore Barlow. The team have supported us on a range of matters, including establishing a trading a subsidiary, support with collaboration agreements, governance advice, and copyright advice. They have an excellent approach to customer service combined with really strong expertise in the charity sector.
We used Moore Barlow for a charitable organisation’s restructure during the midst of the pandemic and were delighted by their responsiveness then and their familiarity with the legal and financial territory. Their team work was great – we got continuity and level of staff seniority appropriate to each stage of the process.