Navigating the Charities Act
A Valuer, Investment Agent and Solicitor Share Their Perspectives
Navigating the Charities Act
A Valuer, Investment Agent and Solicitor Share Their Perspectives
The Charities Act 2011 governs the way charities dispose of land in England and Wales, and means that charity trustees must take additional steps in property transactions. The Charities Act 2022 brought about welcome changes which reduced some of the red-tape, but it remains important that charities and their advisers appropriately navigate the hurdles and safeguards of charity law in property matters.
We brought together three specialists - a valuer, an investment agent and a solicitor - to explore the Act from their respective vantage points. From the qualifications required to prepare a Designated Adviser’s Report, to the merits of auction as a disposal method, to scenarios when Designated Adviser’s Reports are needed and timings; their combined insights offer a comprehensive guide for any charity considering a property transaction.
The Valuer’s View
The starting point for any charity land disposal is understanding who is qualified to advise and what form that advice should take. The 2022 Act brought welcome changes here, broadening the pool of professionals who can act as designated advisers whilst retaining important quality thresholds.
Gareth Hosgood Partner Allsop Commercial Valuation
The starting point for any charity land disposal is understanding who is qualified to advise and what form that advice should take. The 2022 Act brought welcome changes here, broadening the pool of professionals who can act as designated advisers whilst retaining important quality thresholds.
Gareth Hosgood Partner Allsop Commercial Valuation
Q: Who is qualified to undertake a Charities Act report?
The Valuer:
Following the implementation of Sections 17 and 19–22 of the Charities Act 2022 in June 2023, charity trustees now have greater flexibility in choosing who can prepare a Designated Adviser’s Report (DAR). You can instruct a Fellow, Member or Professional Associate of the Royal Institution of Chartered Surveyors (RICS), or other qualified property professionals, to act as your designated adviser, depending on what is most appropriate for the land and transaction in question.
The key requirements are that the adviser must have ability in, and experience of, the valuation of that particular kind of property in that specific area, and they must be instructed by the charity trustees to act exclusively for the charity. Interestingly, the 2022 Act also introduced an explicit provision allowing a DAR to be written by a charity trustee or an officer or employee of the charity, provided they have the same qualifications as an independent adviser—though in practice, particularly for complex transactions, it is often more appropriate to seek an independent view.
Q: How does a Designated Adviser’s Report differ from a valuation report, and how can such a report help in the disposal process?
The Valuer:
A Designated Adviser’s Report is not simply a valuation report. Whilst an ordinary valuation focuses on determining market value, a DAR is far more comprehensive, covering five specific advice points set out in the 2023 Regulations:
- the value of the land;
- any steps to enhance that value;
- how the land should be marketed;
- anything else that could ensure the best terms for the charity;
- and any other matters the adviser believes trustees should know about.
The DAR is essential for three key reasons. Firstly, it is a legal requirement under Section 117 of the Charities Act 2011—trustees must obtain and consider the report before committing to a disposal and decide that the terms are the best reasonably obtainable. Secondly, it protects trustees from personal liability if a sale proves unwise and they failed to comply with the Act’s requirements. Thirdly, it safeguards the charity’s assets by ensuring value is maximised. The designated adviser should be consulted at the very outset of the process to ensure trustees get the best benefit from their advice and to protect both the charity and its trustees.
The Investment Agent’s View
With the adviser’s report in hand, trustees must then decide how best to bring the property to market. The method of sale is a critical decision - and one that can have a direct bearing on whether trustees can demonstrate compliance with the Act.
Tom Hanson Partner Allsop Commercial Auction
With the adviser’s report in hand, trustees must then decide how best to bring the property to market. The method of sale is a critical decision - and one that can have a direct bearing on whether trustees can demonstrate compliance with the Act.
Tom Hanson Partner Allsop Commercial Auction
Q: Why are auctions a good method of sale when the Charities Act comes into play?
The Investment Agent:
The Charities Act requires trustees to demonstrate that they have achieved the best price reasonably obtainable in the market, and auction sales help satisfy this obligation because they create genuine competitive tension and allow the market to determine the price transparently. The outcome of an auction provides trustees with objective evidence that they exposed the asset to the widest range of potential purchasers and allowed buyers to bid against one another on equal terms, reducing the risk of criticism or challenge that the property was sold at an undervalue. This is one of the key reasons surveyors, acting as designated advisers under the Act, frequently recommend auction as an appropriate method of disposal for certain commercial assets.
Recent Allsop auction results illustrate the breadth of charity-owned assets that have been successfully brought to market through the auction process:
Lot 46 – Newbury, November 2025: 49–50 Northbrook Street – a Grade II listed freehold multi-let retail and office investment in the heart of Newbury’s town centre. Sold for £785,000, reflecting a net initial yield of 12.30%. View Property
Lot 21 – Southsea, September 2025: A freehold convenience store investment at 73–75 Albert Road. Sold for £300,000. View Property
Lot 74 – Chislehurst, September 2025: A well-located vacant freehold community centre with six self-contained one-bedroom residential units above. Sold for £1,640,000. View Property
Lot 30 – London SW1, May 2024: A freehold office, car park and residential ground rent investment in a prime central London location. View Property
Each of these transactions demonstrates how auction can accommodate a wide variety of charity-owned property types - from listed town-centre buildings to community assets and ground rent investments - whilst providing the transparency and competitive process that the Act demands.
Q: What additional points need to be covered within the legal packs if selling at auction?
The Investment Agent:
When selling a Charities Act property at auction, the legal pack typically needs to be more comprehensive. In addition to the usual title documents, searches, leases and replies to enquiries, the pack should include the relevant Charities Act compliance elements, such as evidence of the trustees’ power of sale, appropriate certificate wording, and execution details confirming the trustees’ capacity to enter into the transaction.
The Solicitor’s View
It is important for charity trustees to consider Charities Act compliance as early as possible when it comes to the contemplated sale or disposal of charity land. Charity specialist solicitors and surveyors will guide charity trustees through the compliance considerations.
Richard Jones Partner Russell-Cooke Charity & not-for-profit
It is important for charity trustees to consider Charities Act compliance as early as possible when it comes to the contemplated sale or disposal of charity land. Charity specialist solicitors and surveyors will guide charity trustees through the compliance considerations.
Richard Jones Partner Russell-Cooke Charity & not-for-profit
Q: When is a Charities Act Designated Adviser’s Report required?
The Solicitor:
The land provisions of the Charities Act 2011 impose restrictions on charities when it comes to the disposal of charity land. The purpose of the legislation is to safeguard against charities disposing of (potentially) valuable assets at an undervalue, or unnecessarily. Certain additional steps therefore have to be taken when a charity disposes of land. What is considered a ‘disposal’ of charity land is rather broad, and for example includes freehold sales, granting of leases, surrendering leases, granting easements and granting options.
Obtaining and considering the advice within a Designated Adviser’s Report (formerly known as a Qualified Surveyor’s Report), is one of the most common ways in which a charity would comply with the disposal restrictions in the Charities Act. A DAR is obtained where the charity is disposing of land in an ‘arm’s length’ transaction, usually for full market value. A Designated Adviser will most commonly be a RICS qualified surveyor (such as Gareth Hosgood at Allsop), but it can also be certain grades of agricultural valuer and estate agent. The Designated Adviser produces the report (in a Charities Act compliant format), which provides advice to the charity trustees on various matters, and in particular whether the disposal is in the best interests of the charity and on the best terms (and price) reasonably obtainable.
Whilst the involvement of a Designated Adviser and DAR in a charity land disposal typically avoids the involvement and consent of the Charity Commission, a DAR may still be required as supporting evidence where a charity has approached the Commission in a more complex case.
Following changes introduced by the Charities Act 2022, it is now possible for a charity to dispose of land at an undervalue but for ‘social investment’ purposes. A social investment disposal would still involve the charity getting meaningful financial return, but less than best price, and it’s allowed to do so because the disposal would in some way directly further the charity’s purposes. A DAR is required in this scenario too.
A DAR is also required where a charity is selling a property at auction, with the Designated Adviser advising on a reserve price (in line with their guidance as to the best price reasonably obtainable).
A DAR would not typically be sought where land is being transferred to another charity for nil value, or where other exemptions apply.
Q: At which stage should a Designated Adviser’s Report be sought?
The Solicitor:
A DAR should be sought as early as possible in the disposal process, preferably before marketing. This is recommended as the report is required to advise on points such as whether it is necessary to market the property (and the timings of such), and whether works should be carried out to enhance the property before marketing.
If the charity has commissioned a DAR at this recommended early stage, there should also be an updated version of the DAR (or addendum report) issued when a buyer has been chosen and legal transactional documents are in agreed form. This final version of the DAR should be issued before the exchange of any contracts, and we would typically expect to see the DAR circulated at a board meeting where the final form legal documents are being reviewed and signed by trustees.
If the property is being sold at auction, the DAR must be issued and considered before the property goes to auction.
In Summary
The Charities Act 2022 has provided some added flexibility for charity land disposals, but the core principles remain unchanged: trustees must act in the best interests of their charity, obtain the best terms reasonably obtainable and be able to demonstrate that they have done so. As our three specialists make clear, the key to a successful disposal lies in early, coordinated advice. A Designated Adviser ensures the charity understands the value of its asset and how to maximise it. An experienced investment agent can recommend the most appropriate method of sale—whether auction or private treaty—and manage the process to deliver competitive tension and transparency. And a solicitor ensures that the appropriate steps have been taken and properly documented, protecting both the charity and its trustees from regulatory action by the Charity Commission.
For charity trustees contemplating a property disposal, the message is clear: take advice early, take it from qualified professionals, and ensure that every element of the process—from the Designated Adviser’s Report to the legal pack—is handled with the rigour the Act demands.
Note: The solicitor’s commentary in this article is based on the Charities Act 2011 (as amended by the Charities Act 2022) and publicly available guidance including the Charity Commission’s CC28 publication. It is intended as general information only and does not constitute legal advice. Trustees should seek independent legal advice tailored to their specific circumstances.
Our Contributors
Gareth Hosgood
Gareth Hosgood is a Partner in Allsop’s Commercial Valuation Team. He specialises in undertaking valuations for tax, probate, matrimonial disputes and Charities Act purposes as well as Section 18 Dilapidation valuations.
Tom Hanson
Tom Hanson is a Partner in Allsop’s Commercial Auction Team and provides sales advice across the country for his clients via auction. The Commercial Auction team is the UK’s No.1 commercial auctioneer.
Richard Jones
Richard Jones is a Partner in Russell-Cooke’s Charity & not-for-profit department. Richard is a commercial real estate solicitor, specialising in acting for charity, non-profit and education sector clients.
Gareth Hosgood
Gareth Hosgood is a Partner in Allsop’s Commercial Valuation Team. He specialises in undertaking valuations for tax, probate, matrimonial disputes and Charities Act purposes as well as Section 18 Dilapidation valuations.
Tom Hanson
Tom Hanson is a Partner in Allsop’s Commercial Auction Team and provides sales advice across the country for his clients via auction. The Commercial Auction team is the UK’s No.1 commercial auctioneer.
Richard Jones
Richard Jones is a Partner in Russell-Cooke’s Charity & not-for-profit department. Richard is a commercial real estate solicitor, specialising in acting for charity, non-profit and education sector clients.
