Acquiring and disposing of land and buildings

There are two reasons that an organisation may wish to acquire an interest in land or buildings:

- As an investment

- To use the space for their activities;

Charities are subject to special rules about the types of investment they can make, but all boards should take steps to make sure that the additional risks of this type of transaction are fully considered. Most organisations will have the power to acquire land and buildings, and the power to secure loans and mortgages, but the board must check. Even if an organisation has the power to purchase, the board should take all reasonable steps to make sure that the transaction is in the best interests of their organisation. This may mean an investigation into the suitability, affordability, and value for money of the proposed acquisition. If the transaction is complex, could cause serious loss, or the organisation has little experience with similar dealings, then board members should take extra steps to protect their organisation.

The Charity Commission recommends that board members obtain and consider a title (ownership) report from a legal advisor, and a survey report. The list of acceptable qualifications for surveyors was broadened by the Charities Act 2022. Advisors may be board members if allowed by the organisation’s constitution, insurers, and conflict of interest policy.

For further guidance see

Acquiring land

Charity land: mortgaging your charity’s land in England and Wales

Like any other important decision, board members must ensure that any disposal of land or buildings is within their power and in the best interests of their organisation. The Charity Commission publishes guidance relating to all sales and leases of land, which sets out special steps that are required for longer term (or higher value) leases, for any disposal to a connected person, and for land that has been designated for a specific use. There are also specific types of transactions that require the prior consent of the Commission, for example, when a decision has been made to dispose at less than market value.

In the majority of cases, an organisation should consider obtaining advice from a property lawyer with experience in dealing with similar transactions, and must obtain a surveyor’s report so that the board can show that it is in the best interests of their organisation to proceed with the disposal. The list of acceptable qualifications for surveyors was broadened by the Charities Act 2022. It may be necessary to advertise the disposal. If the costs of taking those steps are prohibitive, or if the transaction is with a connected person, or involves designated land, then it may well be necessary to obtain the prior consent of the Commission.

For further guidance see

Charity land: overview for selling or leasing your charity’s land

Sales, leases, transfers or mortgages: what trustees need to know about disposing of charity land (CC28)