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Ÿ Do not get too little money on a market disposal of a property
In support of the above take appropriate professional advice from appropriate experts in relation to the terms that should reasonably be expected for
any transaction.
There are special rules that apply above and beyond the duciary duties on disposals of property and mortgages.
DISPOSALS OF PROPERTY
Unusually for a charity asset the special rules add extra hurdles for disposals of interest in land (largely for historical reasons). Historically the default position was that any disposal of interest in land required Charity Commission approval. However, that has (for obvious reasons) proved unworkable and disproportionate in practice.
It should be noted that the restrictions do not apply to “charity” disposals
(i.e. disposals for less than market value to another charity that ts within
the charitable objects of the disposing charity). Many religious institutes
have disposed of missions formerly run by them to newly formed charities speci cally set up by the religious institute for that purpose, often involving ongoing connection with the governance of the new charity. Such disposals are not subject to the restrictions set out below.
The disposal restrictions do not apply where the particular disposal is made under a statutory obligation or authorisation.
Other disposals are usually expected to be at full market value and the legislation anticipates the charities trustees, before disposing, have received and approved a quali ed surveyors’ report that validates the proposed disposal. Broadly speaking, the report addresses how best the relevant property should be marketed in order to get the best terms reasonably obtainable and validate the expected price.
Ÿ There are a couple of quali cations:
o Where the disposal is a lease of less than seven years then the reporting requirements are less onerous; and
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