On 14 June 2023, the Charities Act 2022 came into effect, updating the Charities Act 2011 which contains all the statutory powers and obligations that charities have to comply with.
Included in the changes were updates to Section 119 of the Act, which deals with the statutory requirements of charities in relation to the sale of property assets.
But what has changed and how will this affect charities large and small? Senior Surveyor, Andrew Soane, explains.
What is Section 119?
Section 119 of the Charities Act 2011 covered charity obligations in relation to the sale of property, including freehold and leasehold assets over seven years.
It also addressed property rights such as easements and rights of way or wayleaves which can include granting permission for utility companies to install fibre optic broadband across a charity’s land, for example.
Ahead of selling a property asset, under Section 119, charities were required to obtain a written report similar to a Red Book Valuation of the proposed disposal. Previously, this had to be done by a Royal Institution of Chartered Surveyors (RICS) Registered Valuer.
The property also had to be advertised in accordance with the surveyor’s report, which would be written in line with The Charities (Qualified Surveyors Reports) Regulations 1992. There was also a requirement to report on specific things about a property which had no bearing on its actual disposal.
In short, the process was intensive and costly for charities which is why changes to Section 119 have been made under the Charities Act 2022 to modernise it.
The aim of the changes was to simplify the process of selling property and bestow more powers upon trustees of charitable organisations. This in turn would allow them to deal with more of the process themselves and enable them to rely on the best adviser for their properties.
However, whilst the changes are welcome, the benefits for smaller charities are questionable. So, what has changed and how might it affect your registered charity?