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o Where the disposal is to a “connected person” (i.e. someone connected to the charity which may include a member of the institute, a trustee, an employee, of cer or agent or person connected to any of these individuals) Charity Commission approval is in any case required: this is to avoid any suggestion of impropriety in the disposal (the giving of a “cheap deal”)
There is much detail in the rules and the above is only the briefest summary, but please be aware that the rules apply to all “disposal of interests in land” including grants of easements; restrictive covenants and the like.
ARE THERE RULES WHEN TAKING OUT MORTGAGES?
If a charity considers taking out a mortgage over its properties, then there are further restrictions that apply. In particular, the trustees must obtain a report before taking on any mortgage which con rms three things:
1. That the money that is being secured by the charge could not be got better in some other way
2. That the terms of the charge and lending are the best reasons obtainable 3. That the charity can afford to repay the terms of the loan
Again there is much detail behind this and trustees are recommended to take advice.
WHAT KINDS OF THINGS MATTER IN LEASES?
Trustees may well come across situations where they are required to consider the grant or the taking of a lease. This may well lead to the delivery of a large and long document, containing numerous terms which will merit translating so that the trustees are assured that they are doing the right thing.
126 Chapter 7