When a registered charity plans to sell, lease, or transfer property, the trustees face a distinct set of legal responsibilities. Under the Charities Act 2011, trustees have a statutory duty to ensure that any property disposal achieves the best terms reasonably obtainable for the organisation. To satisfy this legal requirement, trustees will generally need a report from a suitably qualified designated adviser, with relevant local experience, before committing to a disposal. Our RICS Registered Valuers can provide this service; the precise requirements and exemptions should be checked for the proposed transaction.
When is a Charities Act Valuation Required?
A designated adviser’s report is generally required for sales, certain leases and disposals of property rights, subject to statutory exemptions. Some leases require competent advice rather than a full report. Examples of disposals to check include:
Selling a freehold property
Granting a lease for a term exceeding seven years
Transferring land or granting new rights/easements over property
Note on Acquisitions: While the statutory requirement strictly applies to property disposals, the Charity Commission strongly recommends obtaining independent professional advice when purchasing property to ensure the charity is not overpaying.
How it Differs from a Standard Valuation
A Charities Act valuation goes far beyond simply providing a figure for current market value. It is a strategic advisory tool designed to protect the charity from risk. A compliant Designated Adviser's Report must actively advise the trustees on how to optimise the transaction:
| Valuation Component | Strategic Advice Provided |
|---|---|
| Optimal Method of Disposal | Outlining whether to sell or lease via private treaty, public auction, or formal tender to get the best return. |
| Marketing & Advertising Strategy | Detailing exactly how the property should be exposed to the market to ensure transparency and competition. |
| Pre-Sale Improvements | Assessing whether carrying out specific repairs, refurbishments, or obtaining planning permission prior to marketing would increase the value enough to justify the cost. |
| Development & Hope Value | Identifying potential future value (e.g., development potential) and advising on whether to include overage or clawback clauses to protect future charity income. |
Why Professional Valuation Matters for Trustees
Trustees hold a personal, fiduciary responsibility to protect their charity’s assets. Proceeding with a property transaction without a compliant RICS valuation can cause major disruptions, including:
Delayed or voided transactions that fail to clear legal due diligence.
Regulatory intervention or formal investigation by the Charity Commission.
Personal liability for breach of statutory duty if the property is found to have been undersold.
By instructing an independent RICS Registered Valuer, trustees gain the robust, evidence-based documentation required to demonstrate compliance, satisfy stakeholders, and protect the charity's financial future.
How We Can Help
Our team of experienced RICS Chartered Surveyors regularly handles Charities Act valuations for a wide range of charitable organisations and religious bodies. We understand the tight timelines and specific regulatory requirements involved in third-sector property transactions.
If you are a trustee planning a property disposal, or a legal professional acting on behalf of a charity, contact us today to discuss how we can assist with a compliant Section 119 Report.
