Changes to the Charities Act – What You Need to Know

What happened?

The Charities Act was updated in June 2023 when the rules relating to charity property sales and lettings changed. There were several other changes not related to real estate.

How are property transactions affected?

• Charities are no longer obliged to consider the written advice of a Chartered Surveyor (a Qualified Surveyor’s Report, or QSR) when disposing of an interest in land or property.
• The role of ‘designated adviser’ has been introduced. This could be a Surveyor, but it could also be a fellow of the National Association of Estate Agents, or a fellow of the Central Association of Agricultural Valuers.
• A designated adviser could be an employee of the charity, provided they have the right qualifications.
• Charities are no longer obliged to advertise the land or property unless the designated advisor makes that recommendation.

Why did the law change?

Some larger charities making frequent land transactions thought the Surveyor’s report was unnecessary and bureaucratic. For low value transactions, the cost of obtaining the report was out of proportion to the value it added.

For example, paying £1,000 for a report did not make sense if the land was only worth £7,000.

Other people felt that Surveyors produced the reports inconsistently.

What’s TSP’s experience so far?

We agree that the requirement for a QSR was sometimes unnecessary.

We have written reports for small transactions like lease surrenders and assignments. These reports felt unnecessary because these low-value transactions represented a very low risk.

The fact that these are no longer required is a good thing, and our clients are saving money.

However, the changes have introduced a new risk – that poor advice could lead to a significant loss for charities making infrequent transactions.

So it is still sensible to get a report from a Surveyor for high-value or one-off transactions.

Do I still need a Qualified Surveyor’s Report?

No, but you must seek advice from a designated advisor.

Where can I find more information?

• We strongly recommend watching this excellent webinar by law firm VWV
• Alternatively, full written guidance is available on the GOV.UK website