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.