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How to sell or lease charity property

It鈥檚 usually straightforward to sell or lease charity land and property - most charities don鈥檛 need Charity Commission approval. You must try to get the best deal for your charity and follow any rules in the law and your governing document.

Before you start, you and the other trustees must be sure that:

• you have permission to sell or lease the property 鈥� either in your governing document or in the law
• there is nothing in your governing document that prevents you selling or leasing the property
• your charity actually owns the title to the property
• the sale or lease is in the charity鈥檚 best interests
• if the property is designated for a particular purpose, such as a recreation ground, that the sale or lease doesn鈥檛 go against this

Charity land sales and leases - legal requirements

The law says you must:

• try to get the best deal for your charity
• take written advice, including a valuation, from a qualified surveyor before you agree a sale or lease (although you don鈥檛 need one for a short lease)
• advertise the sale or lease, unless the surveyor says otherwise

To complete the sale or lease without commission involvement, you must comply with the requirements before entering into an agreement. If you do not, you will need to apply to the commission during the process, which will delay you being able to complete the sale or lease.

You also need to provide statements and certificates to assure the purchaser:

• how the land is held and by what sort of charity
• that the land is being disposed of legally

Some transactions don鈥檛 need to comply with these requirements, such as when you sell or lease property to another charity with similar aims.

When to get commission approval to sell or lease

You only need the commission鈥檚 approval if you:

• want to sell or lease any land that your governing document says must be used for a particular purpose (unless you are replacing it with equally suitable property, and this doesn鈥檛 go against the charity鈥檚 purposes)
• don鈥檛 want to follow the surveyor鈥檚 advice, such as the price they suggest or the method of sale or lease
• are specifically prevented from selling or leasing by your charity鈥檚 governing document
• intend to sell for less than the market value
• want to sell or lease to someone connected to the charity, such as a trustee, employee or their relative

If you want to sell or lease property to someone connected to your charity, apply using the .

Read guidance on:

• selling or leasing for less than the best price
• getting commission approval to sell or lease charity property

How to buy or rent charity land and property

Most charities can buy or rent property without commission approval - but you must make sure it is in your charity鈥檚 best interests. You can buy land or property for your charity to use or to generate income it can use to meet its purposes.

You and the other trustees are responsible for protecting your charity鈥檚 money and assets. This means you should make sure:

• the property is suitable for your needs
• the price is fair, or even discounted, compared with similar properties on the market
• you understand any legal obligations relating to the land, such as planning restrictions
• any loan or mortgage terms are reasonable and competitive

When to get commission approval to buy or rent

You need commission approval if you want to:

• buy or rent land from one of the trustees or from someone closely connected to the charity, such as a trustee鈥檚 relative
• buy land when your governing document specifically forbids it
• use permanent endowment (money from which only the income can be spent) to buy leasehold land and property

The commission鈥檚 detailed guidance on acquiring land explains when you need its approval to buy or rent charity property.

Mortgages and loans secured against your charity鈥檚 property

You can take out a mortgage or loan secured against your charity鈥檚 land without commission approval as long as you get legal advice in writing and ensure that the loan:

• is needed and used for an activity that fits with your charity鈥檚 purposes
• has reasonable and affordable terms and repayments

Charity land: who should hold the title

Charity land must be registered in someone鈥檚 name with HM Land Registry.

If your charity is a company or charitable incorporated organisation (CIO), you can register the title to the land in the name of your charity.

If your charity isn鈥檛 a company or CIO, you could appoint individuals to hold the land on behalf of your charity (usually some or all of the trustees). This may lead to extra work and expense when trustees change, because you need to re-register land in the names of the new trustees.

To avoid this, you could transfer your charity鈥檚 land to the Official Custodian 鈥� this is a free service that the commission provides that holds your land constantly in the same name regardless of who the trustees are.

Find out more and apply using the .