Property that belongs to, is sold, purchased or gifted to charities is regulated by the Charities Act 2011. Our charity and not-for-profit experts are here to support and guide you through the necessary processes with regard to ‘dealing’ with property.
Running a charity or not-for-profit can be complex, and Trustees must ensure that they are acting in the charity’s best interests.
Whether you are buying, selling or leasing property as a charity or you are ‘dealing’ with property that belongs to a charity in any other way for (example granting as easement over charitable land) you must ensure that you comply with the relevant provisions of the Charities Act 2011. If you are buying land for a charity, the Land Registry will require specific wording to be included in the Transfer/Conveyance. Charities often overlook these requirements or are simply unaware of them. A charity trustee who acts in breach of their duty may be personally liable for any loss caused as a result.
In most cases compliance with the Charities Act is normally straight forward. However if your property or other assets count as “permanent endowment” this can be more complex and you will need Charity Commission approval. Whatever your situation we will be able to guide you through the process.
Charities often receive properties as gifts, either in a Will or as a gift during someone’s lifetime. As a charity that is receiving a property, you will need to consider what your charity’s property owning structure is. You will also need to consider whether it falls into the category of ‘restricted funds’ for accounting purposes. If your charity normally holds properties in the names of individual trustees, the gift of an additional property might be an opportune moment to re-evaluate that structure and the structure of your charity as a whole. As a general rule charities should avoid holding properties in the names of individual Trustees.
For further advice, please contact a member of our Charities and Not-for-Profit team based in Canterbury, Ashford and Herne Bay.
