When a charity decides to acquire or dispose of property assets, either leasehold or freehold, they are required to do it in a certain way, under Section 119 of the Charities Act 2022.
Designated Adviser Reports (DAR) play a vital role in the process.
But what are they and why are they so important? Registered Valuer, Andrew Soane, an Associate in our Valuation team, explains.
A DAR is a legal requirement for some property transactions involving charities, particularly when disposing of property, either by a sale or a lease.
It differs from the usual property valuation report because the designated adviser is required to give guidance on a variety of issues, not just price.
It’s designed to ensure the charity gets the best value for their asset.
What does a Designated Adviser Report include?
Charities can expect a DAR to include an assessment of the property / land value. It delivers strategic advice on the disposal route, helping to ensure that charities achieve the best realistic value while avoiding unnecessary costs.
It also covers steps to potentially enhance the asset’s value, how to market the land / property, and any other relevant issues.
Who prepares a Designated Adviser Report?
It is prepared by a Designated Adviser (DA) – typically a Registered Valuer, who provides independent advice to the charity’s trustees.
This independent advice helps Trustees to establish the merits (or otherwise) of a proposed transaction, especially in relation to the sale or transfer of land or property.
Why are Designated Adviser Reports important for charities?
In essence, a DAR is a crucial safeguard to ensure that charities are making informed decisions when dealing with their property assets and that they are acting responsibly and transparently.
Trustees must carefully consider the DAR’s recommendations and ensure the transaction is in the best interests of the charity.
There are some exceptions to the DAR requirement, such as when disposing of land to another charity with the same aims and objectives, or some leases shorter than seven years.
However, it is still wise to seek professional advice from a property expert, not just to consider the terms of the transaction, but to also ensure any remaining interests are properly protected.
Vail Williams’ valuation team supports a wide range of charities and charitable trusts — from local community groups to national bodies — with the disposal of both leasehold and freehold assets, in line with the Charities Act 2022.
