The Charities Act 2022 - Understanding the New Designated Adviser Report (‘DAR’)

The changes to how charities hold and deal with land introduced by the Charities Act 2022 are now in effect. Charities must comply with certain legal requirements before they dispose charity land.

What are the changes to the Act?

• Designated Advisers - more professionals can now provide advice on land disposals;

• Trustee advice - trustees, officers, or employees can give advice on disposals if they meet the necessary requirements;

• Trustee discretion - trustees can decide how to advertise proposed disposals of charity land; and

• Leasing to employees - charities no longer need Commission authority to grant short periodic or fixed term tenancies to employees.

What is a DAR and which property transactions need one?

Trustees will be required to obtain a DAR from an independent property adviser. This replaces the old Qualified Surveyor’s Report and is required if/when:

• selling or transferring land;

• granting, transferring or surrendering a lease;

• granting or releasing rights;

• granting or releasing an easement or a right of way; and

• granting or releasing a wayleave.

What do DARs need to contain?

A DAR must include:

• The value of the land;

• Possible steps that could be taken to enhance the value;

• Whether and/or how the land should be marketed;

• Anything else which could be done to ensure that the terms of the disposition are the best that can reasonably be obtained for the charity; and

• Any other relevant matters that should be drawn to the attention of the charity trustees.

The report must also include:

• A statement from the adviser confirming their qualifications and experience in valuing similar land; and

• A declaration that there are no conflicting interests with the charity.

Who can provide a DAR?

A Designated Adviser must be:

• a fellow or professional associate of the Royal Institution of Chartered Surveyors (RICS); or

• a fellow of the Central Association for Agricultural Valuers (CAAV); or

• a fellow of the National Association of Estate Agents Propertymark (NAEA).

If a charity wishes to pay a trustee for serving as the Designated Adviser, they must:

• Ensure their governing document allows for trustee payment; and

• Follow legal requirements regarding trustee compensation.

Next steps if you are a charity dealing with land disposals:

• Review your current land disposal procedures to ensure they align with the new requirements;

• Appoint a qualified Designated Adviser to assist with property transactions and to ensure you are getting the best possible terms for your charity;

• Educate your trustees, officers, and employees on their roles in land disposals and the importance of managing conflicts of interest; and

• Keep up-to-date with charity regulations and best practices.

Need Legal Advice on Charity Land Disposal?

If your charity needs legal advice regarding the disposal of land, contact Lawson West Solicitors today. Our team of expert solicitors can help you navigate the new legal requirements under the Charities Act 2022 and ensure your land transactions are in compliance with the latest regulations.

If you believe you have a situation where you require legal advice, please contact us on telephone 0116 212 1000 or 01858 445 480, alternatively fill in the free Contact Us form and we will get in touch as soon as possible.

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