Registered charities must obtain a written valuation report (often referred to as a ‘Qualified Surveyors Report’ (QSR) before entering into a transaction for the disposal such as a sale, letting or granting of any rights of any interest that is owned by the charity.

Charities Act 2011

Sections 117-121 of the Charities Act 2011 states that before a charity disposes of any interest in any land that is owned by the charity, the trustees must obtain a written valuation report from a qualified chartered surveyor to ensure that they transact on the best terms that can be reasonably obtained for the charity.

Does this apply to your Charity?

All charities that are registered at the Charity Commission and those that are subject to the provisions of the Charities Act 2011, for example, scouts, guides and places of worship, need to adhere to these procedures.

Which type of land transactions?

Short leases of seven years or less do not require the involvement of a qualified surveyor.  However, all sale and lease transactions above seven years do require to adhere to these regulations. That said, we would strongly advise that professional advice is sought for all property and land transactions for or on behalf of a charity.

What must the Trustees do?

  • Obtain and consider a chartered surveyor’s written report.
  • Dispose of the interest detailed within the surveyor’s report under headings such as typical lease terms or traditional methods of disposal.
  • Achieve the best terms that can be reasonably obtained for the subject land.

What must the Chartered Surveyor do?

  • Be instructed by and solely for the charity.
  • Be a member (MRICS) or fellow (FRICS) of the Royal Institution of Chartered Surveyors.
  • Have the required skill and experience of similar valuation instructions in the specific locality.
  • Advise the appropriate method of disposal.
  • Advise as to whether any works would be required or be advantageous to be undertaken prior to a sale to maximise sale price.
  • Advise upon the marketing strategy in order to achieve best price.

Charities’ trustees consider the overall strategy of the charity before disposing of any interest in the land or property to ensure that the charity is getting best value for any interest they hold.  It is important however, that the trustees are not required by statute to follow any advice and or course of action put forward by the surveyor provided that they have considered that advice and for other operational or charitable purpose it is decided that it be advantageous to undertake a difference course of action.

Parkinson Real Estate have assisted the trustees of charities directly in the disposal of residential and commercial property and land as well as providing valuation advice in relation to disposal and acquisition.  For further information please contact Mark Smith, Director – Valuation Advisory on 07796 825168 or mark.smith@parkinsonre.com.