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Five Issues for Charities to Consider When Selling Commercial Property

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Charity trustees are advised to make themselves aware of the many rules and regulations governing the disposal of commercial property. They exist to ensure that the charity’s best interests are always served – and, if breached, any transactions may be declared void by the courts.

hlw Keeble Hawson logoBelow is a checklist of five key considerations:

  1. Price must be right

    Trustees should ensure they have complied with their statutory duties and obtained a valuation of the property. Advice from a surveyor should be taken at an early stage.

  2. Overage

    Many charities will own bare land with potentially high development value. The increase in value of the land once developed can be significant and can be shared with the developer through an overage or clawback agreement. This should be considered at an early stage.

  3. Leaseback

    Sale of a property asset with an immediate leaseback could generate a significant release of capital for a charity whilst offering short-medium-term security of occupation.

  4. Land Registry

    Charity property should be protected by entries on the Land Registry register of title, ensuring it cannot be transferred to a third party without certification that the statutory requirements have been met. This can cause delays, so instruct a solicitor to check this early in the process.

  5. Connections

    Sales to persons or organisations with connections to the charity are likely to come under greater scrutiny. Take advice early to ensure any such proposals meet with legal requirements and the charity’s own rulebook.

Get in touch with us for a free initial consultation with one of our property specialists to ensure your sale progresses smoothly. In any aspect of charity law, it is always a good idea for trustees to take advice from a legal practice with a track record of third sector expertise. hlw Keeble Hawson’s highly experienced team provides specialist and comprehensive guidance for charities and voluntary organisations and has presented many trustee training courses.

For more information on the sale of charity property, contact James Alger at jamesalger@hlwkeeblehawson.co.uk or call 0114 252 1412.

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