In most cases, you don't need our consent to sell your charity's land, as long as you make sure you do certain things before you go ahead to show you're transparent and accountable, and that you're getting the best deal you can reasonably expect in the circumstances of the sale. However, there are some times when you will need our consent. Find out when our consent is needed and how to apply for it.
Before you enter into an agreement to sell:
The summary chart in section B6 of Sales, leases, transfers or mortgages: What trustees need to know about disposing of charity land (CC28) will help you decide whether you need to come to us for consent before you proceed with the sale.
You'll need our consent only if:
If you decide that you need our consent, see later section How do we get the Commission's consent to sell land?
Most charities can rely on the power in the Trusts of Land and Appointment of Trustees Act 1996 to sell their land. See:
You should check the governing document of your charity to make sure there is no clause that forbids you from selling the land. If there is, you'll have to amend your governing document to allow you to sell. See:
In this context, a connected person is either:
For a full legal definition, see:
Land you are acquiring to replace land used for the purposes of the charity must be:
The replacement land does not have to be:
This must be someone:
When you're selling charity land, you need to supply statements and certificates to assure the buyer about a range of things. The statements show:
The certificates show that the trustees:
In this way the buyer can have confidence in the validity of the sale.
If you're selling land to a connected person:
If you want to sell land used for the purposes of the charity without giving public notice you should contact us and tell us:
We can't guarantee we will let you do this, because we aim to make sure trustees are accountable and open about their dealings with the public, so we do not often allow public notice to be dispensed with. We will consider each case on its merits.
If you think you need our consent for any other reason, contact us and tell us:
After agreeing at a board meeting to move to smaller offices, the trustees of an incorporated charity decided to sell their current accommodation. The Memorandum and Articles, the governing document of the charity, had the usual clauses found in company documents giving them power to sell their charity land.
What the trustees did:
The trustees contacted their solicitors to act for them. Before they even thought about entering into a contract for the sale, the trustees then contacted a local qualified surveyor to make a report that complied with The Charities (Qualified Surveyors' Reports) Regulations 1992 (explained in appendix K2 of Sales, leases, transfers or mortgages: What trustees need to know about disposing of charity land (CC28)). He advised them to advertise with two local estate agents who dealt mainly with commercial properties.
The trustees considered the surveyor's report and valuation and advertised the property. After reviewing the offers, the trustees decided to accept the one that seemed to give the best terms that they could reasonably expect to get in the circumstances. They instructed their solicitors to draw up the contracts, including the statements and certificates needed in the documentation.
Did the trustees need our consent?
No they didn't. The trustees did not even need to inform the Charity Commission of their plans. See:
A charity is required by its purposes to provide community facilities for the people in the village. Over the years the village had grown to the eastern side and the facilities were now rather on the edge of things. The trustees planned to sell the land and, with the proceeds of the sale, buy other land to set up new facilities nearer the main part of the village.
The trustees looked in their governing document and found nothing that prohibited the sale, and they knew they could rely on the power in the Trusts of Land and Appointment of Trustees Act 1996 (as many charities can).
If the trustees were planning not to replace the land, they would then have had to prepare a public notice that explained their plans and reasons. They would then have had to consider any responses they received and consider those before they made a decision whether to proceed or not. However, as they were planning to replace the land there was no need to do this.
Their qualified surveyor made a report and a valuation which the trustees considered. Their next step was to advertise, according to their surveyor's advice, to try to get the best terms from the sale. Having previously identified a suitable site for the new community centre, they entered negotiations to buy the land. When the sale of the original property went through they completed their purchase using the proceeds from the sale.
No they didn't. Even though the land the trustees were selling was 'designated' land - it had to be used for the purposes of the charity - they could still proceed without consent from us because they were replacing it with other, suitable premises and complied with all the requirements to proceed without needing to involve us.
If the trustees had decided not to replace the land then it would be unlikely they could continue to fulfil the purposes of the charity - if that had been the case they would have had to give public notice of the sale and also come to us for a Scheme to change the purposes of the charity. See:
Trustees of a charity owned a field that had been given to the charity some years before. It was in the middle of farmland and, although it brought in a small rent each year, was not much use so they decided to sell it.
One of the trustees offered to buy the field as it was next to his farm and he could put it to good use.
The trustees knew that, as it was a fellow trustee who wanted to buy the field, they would need consent from the Charity Commission. First they made sure that, whenever they discussed the situation, the trustee who was a farmer always left the meeting so he did not influence the thinking or decision making of the other trustees.
The trustees employed a qualified surveyor to report on the land and value it and they advertised the sale to see what other offers they might receive, and to see whether the offer the trustee had made was a reasonable one.
Next, the secretary downloaded the necessary forms and notes from our website and completed them with the information the trustees had gathered - this included the value of the land as set out by their qualified surveyor, information about the advertising they had carried out, offers they had received as well as the offer from the trustee. The trustees wanted to accept the offer from the trustee because it was about the same as any other they had received and he was able to complete the sale quickly allowing the charity access to the funds sooner than if had they sold to one of the others in the market.
Did the trustees need our consent?
Yes they did. Because the sale was to a connected person, it was a legal requirement for the trustees to obtain our consent. In this situation it's likely we would have given our consent for the sale to go ahead. This is because the trustees had done all the things they could to be sure the connected person did not influence them and they had made the best efforts to get the best terms for the sale. We would not automatically give consent; we will consider each case on its merits.
What the trustees planned:
Trustees of a theatre charity wanted to sell a corner part of the premises they owned to a developer, allowing him access to a new estate he was building. They negotiated with the developer, agreed a price for the piece of land and exchanged contracts.
What they should have done:
The trustees should have complied with the requirements before they entered into the agreement to sell the land. They should have got a surveyor's report and advertised to try to get the best terms.
Did they need our consent?
Yes they did. The trustees should have gathered all the relevant information before entering the agreement to sell. Because they did things in the wrong order, the trustees now had to come to us for consent to finalise the sale of the land to the developer. We had to make an Order allowing the sale to go ahead. This meant the transaction was held up and the trustees didn't get their money for the sale as soon as they would have liked. It also risked the developer pulling out of the sale and trying to find another access to his development. This would have resulted in loss of funds the charity was expecting to gain from the sale. See:
What the trustees planned:
A playgroup charity in an urban area had a small plot of land bequeathed to them in the will of an old lady who had once been involved with the charity. The trustees planned to sell the land as it was of no use to them - barren waste land in the middle of a remote moor in the south west of England.
What they needed to do:
This appeared to be an easy sale - the trustees just had to get a surveyor to value the land, advertise and then enter the agreement to sell for the best terms they could.
The problem was the trustees could find no qualified surveyor with enough experience of dealing with this sort of property or how this sort of land sold on the market.
Yes they did - or at least, they did need to come to us to talk about it. The reason was because they were unable to get a surveyor's report. In this situation they could not comply with the requirements.
We could do one of two things. We could either make an Order allowing them to proceed with the sale without a surveyor's report on the view that it would be too difficult to find a surveyor - after all, they had already looked. Or, where it was obvious the plot of land was small and of very little value, we might be happy for the trustees to proceed without our further involvement.
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