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largely, at the moment, the rst view of a property is whether or not it is being used for operational delivery of mission. If it is not the next simple question becomes “how is it best used to produce funds to assist the charity in delivering their mission?".
The next question then is to be sure that the property is applied in accordance with your charitable trusts (be it operationally or as a question of investment). On the operational side this can include observing any special trusts that apply to the property. In charity Property jargon this is referred to as designated land. Where the charity has designated land then the land must be used for that purpose. Any variation from that will require, in effect, variation of the charity’s objects and so Charity Commission consent.
This is not to be confused with “permanent endowment” – land can form part of permanent endowment, but the question here is preservation permanently of capital value, not non-disposal of the land itself. Permanent endowment can be sold but must be sold so as to preserve capital and the proceeds (broadly) must be kept as a capital sum.
WHAT ARE THE SPECIFIC RULES THAT APPLY TO CHARITABLE PROPERTY?
As noted above, the rst rule is that property must be used in pursuit of the charity’s charitable objectives. The charity cannot pursue non-charitable activities with the property and if it wishes to carry out commercial activity (such as property development or trading) it will need to consider involving a trading subsidiary.
It should be noted that the charity can apply its property to pursue its charitable objects via an appropriate other charity with appropriately framed charitable trusts and this is picked up below under the question of disposals.
As with all charities the duciary duties of the charity are the critical overall duties on property matters and will include matters such as the following.
Do not spend too much money on projects relating to the property (eg. construction contracts)
Do not spend too much money on purchase of property or leasing the property
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