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In most cases you can sell, lease or otherwise dispose of your charity’s land in England or Wales without asking for authority from the Charity Commission.

You must properly manage these important transactions in the best interests of your charity.

Unless the disposal falls into a very limited number of exemptions, you must also get the best terms you reasonably can. You must follow the relevant legal requirements of the Charities Act 2011, which are explained in this guidance, if the land is held solely by your charity.

Requirements vary depending on:

• whether you have the power to dispose
• how you plan to dispose of your charity’s land
• whether you will dispose to a ‘connected person’
• whether you are looking to dispose of land that must be used for a particular purpose (designated land)
• whether the disposal falls within one of the exemptions listed in this guidance

Use this guidance to help you identify:

• which requirements you must follow for the disposal you are planning
• if you need Commission authority

You may also find thisÌýsummary of the stepsÌý³ó±ð±ô±è´Ú³Ü±ô.

You will usually need to get professional advice on any disposal.

What we mean by ‘land’ and ‘disposal’

In this guidance ‘land’ means any:

• land owned by, or held in trust for, your charity
• buildings on the land
• rights over land, such as easements or restrictive covenants

When we use the term ‘disposal’ we mean:

• selling or transferring land
• granting, transferring or surrendering a lease of your charity’s land
• granting or releasing rights such as fishing rights
• granting or releasing an easement, or a right of way over land
• granting or releasing a wayleave to allow access to facilities on the land

Use ourÌýseparate guidance on mortgages or chargesÌýfor information about these.

How to dispose of your charity’s land

You must follow steps 1-4 whenever you plan to dispose of any of your charity’s land.

You must also follow steps 5 and 6 unless an exemption applies.

1.Be certain that your charity owns the land

You can usually check this with the Land Registry.

2.Be satisfied that the disposal is in your charity’s best interests

As trustees, you must comply with your trustee duties which include:

• acting in your charity’s best interests
• acting with reasonable care and skills
• managing your charity’s resources responsibly

Make sure you comply with your trustee duties whenÌýmaking decisions.

Disposing of land may help you to:

• raise money
• relocate
• reduce some administration

But you should also think about how:

• your charity will operate without the land
• disposing the land may affect your beneficiaries or affect public support for your charity

3.Know if you have the power to dispose of the land

In most cases charities have the power to dispose of charity land. This is usually allowed by a power in law or in your charity’s governing document.

Always take advice if you are unsure about whether your charity has the power to dispose of its land.

Take extra care to check:

• that your governing document, or the documents that explain how the relevant property must be used, does not prevent you from disposing of the land or sets out conditions you must follow
• beforeÌýdisposing of ‘designated land’. This is because the Commission’s authority may be needed to do this. Designated land is land that must be used only for a particular purpose. For example, a recreation ground, or a building which must be used for a school. Read the section in this guidance onÌýdesignated land

4.Check if you need Charity Commission authority

Check if you will need authority by reading this guidance.

Most charities will not need authority. But if you do, apply for it in plenty of time.

5.Get and consider a report on the land

The type of report you must get depends on how you are disposing of the property.

Sales, leases with a fine or premium and other forms of land disposal

You must get a report from a designated adviser acting exclusively for your charity when:

• selling land
• granting a lease of your charity’s land where a fine or premium is paid to your charity. A fine or premium is a lump sum or other benefit, not including rent, paid to a charity on the granting of the lease
• granting or releasing a right, easement or restrictive covenant. These can include a right of way or access to equipment on the land, or a right, such as fishing rights in a lake or river on the land
• granting or releasing a wayleave, which is a formal written agreement giving a right to another party to access your charity’s land for specified activities
• granting an option to buy or lease the land. An option agreement gives someone the right to demand the disposal of your charity’s land to them at a point in the future on the terms of the option agreement
• any other type of disposal that is not aÌýleaseÌýwith no fine or premium, and not a mortgage or charge against the land, for example surrendering a lease. Surrendering a lease means agreeing that it will end

A designated adviser must be:

• a fellow or professional associate of theÌýÌý´Ç°ù
• a fellow of theÌýÌý´Ç°ù
• a fellow of theÌý

You must also be satisfied that your adviser has the ability in and experience of valuing similar land to yours within the same area.

The report must comply with the Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023. Your designated adviser should be familiar with this.

Leasing land without a fine or premium

Most leases do not include a fine or premium. A fine or premium is a lump sum or other benefit, not including rent, paid to a charity on the granting of the lease.

For this type of lease, you must get a report from a person who you believe to have the ability and experience to give competent advice on the lease. You must do this before you agree the lease.

There is no requirement for your adviser to have a professional qualification, but we recommend that they are a member of a relevant professional body such as:

Manage any conflicts of interest

For both situations, you can ask a trustee, officer or employee to produce the report. Check they have the right qualifications, skills or experience. You must manage anyÌýconflicts of interest.

If you want to pay a trustee for this service:

• your governing document must not contain any wording that prevents you from paying a trustee for providing services to the charity
• you must follow the legal requirements for paying trustees

Read guidance aboutÌýpaying trustees.

You should also check your charity’s insurance cover. Not all insurance will cover negligent advice given by an adviser who is also a trustee, officer or employee of your charity.

6.Be satisfied that the proposed terms are the best you can reasonably obtain for your charity

You must:

• consider the report’s recommendations, including how to advertise the disposal
• be satisfied, that the proposed terms for the disposal are the best that you can reasonably obtain for your charity
• ¾±²Ô³¦±ô³Ü»å±ðÌýcertain statements and certificates in the disposal documents

You should keep a clear record of your decision-making. You may choose not to follow all the report’s recommendations, but you should clearly record your reasons for this.

Selling land at auction

You can decide to sell at auction, but you must comply with all the steps above. You may find it helpful to get professional advice.

You should also:

• set the reserve price at or above your designated adviser’s lowest value for the land. The reserve price is the minimum price the land is allowed to sell for at auction
• write into the conditions of the sale that if the purchaser is a connected person, the transaction will be subject to a Charity Commission order being made

When you must get Charity Commission authority

You must apply for Charity Commission authority before you dispose of land if you:

• do not follow steps 5 and step 6 above
• are planning to dispose to a ‘connected person’
• are planning to dispose of designated land in most circumstances

If you do not follow steps 5 and 6

When you apply for Commission authority you will need to explain how you have:

• valued the land with supporting evidence
• advertised the proposed disposal
• managed any conflicts of interest
• decided the proposed disposal is in your charity’s best interests

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If the proposed transaction is with a ‘connected person’

A ‘connected person’ is defined in section 118 of the Charities Act. It is certain people or organisations closely connected to or associated with the charity and includes:

• the trustees and their close relatives
• a donor of any land to the charity and their close relatives
• employees, agents or officers of the charity
• the spouse or civil partner of either a trustee, donor of land, employee, or close relative of a trustee or donor
• organisations in which any of the above have a controlling or substantial interest. This includes a wholly owned subsidiary of your charity

Check the list in section 118 of the Charities Act or get professional advice if you are unsure whether someone is a connected person.

Remember that if you are selling, leasing or otherwise disposing of land to a connected person, the transaction still needs to be in the best interests of your charity and on the best terms that can reasonably be obtained. When you apply for authority, you will need to demonstrate that the terms agreed are the best that can reasonably be obtained and provide a summary of the relevant report on the land.

.

Exemptions

There are exemptions that mean some disposal types can be completed without complying with steps 5 and 6 above.

Leasing land to a beneficiary

You can do this for less than the best rent you could have reasonably expected to receive in the circumstances, if it is a reasonable way of achieving your charity’s purpose. This means you are not required to follow steps 5 and 6 set out above.

Disposing of land to a charity with the same or similar purpose as your charity

You canÌýdo this without following steps 5 and 6 if the only aim of the disposal is to further your charity’s purposes. The disposal would be for nil or nominal value because it is not about raising funds for your charity.

You should check the purposes of your charity and ask to check the other charity’s purposes in their governing document.

The other charity’s purpose must be the same as your charity’s purpose, or must include your charity’s purpose if its purposes are wider than your charity’s purpose.

Where the other charity’s purposes are wider than your charity’s purpose, there must be a restriction in the trusts so that the land being disposed of is used – after its transfer to the other charity – to further your charity’s purpose. This includes if the land is subsequently disposed of by the other charity. If it is, the proceeds of the disposal must be used by the other charity for the purposes of your charity; they must not be used for the wider purposes of the other charity.

Always take professional advice if you are unsure.

Disposing of land to a charity with different purposes does not fall into this exemption and, if you do this, you must follow steps 5 and 6.

Disposing of landÌýwhere your intention is both to achieve a financial return and to achieve your charity’s purpose (a social investment) does not fall into this exemption.

You must follow steps 5 and 6Ìýso that you:

• understand the market value of the land
• decide what you will dispose for, as the difference will form the social investment

Your decision to dispose to make a social investment must comply with your trustee duties.

Read guidance aboutÌýsocial investment.

DisposalsÌýby liquidators, provisional liquidators, receivers, mortgagees or administrators

These types of disposals are not required to follow Steps 5 and 6 set out above.

Disposing of land using a power in an Act of Parliament, other statutory provision or scheme

Some charities are set up by an Act of Parliament or are governed by some other statutory provision or court or Commission scheme. These may give you express authorisation (or a power) to dispose of:

• a specific piece of land or
• land in specific circumstances

If you have express authorisation, you are not required to follow steps 5 and 6 set out above. So, check the wording carefully and get legal advice if you are unsure. You must follow the terms of the power. .

The power must be expressly given for a particular disposal or class of disposal for it to be exempt. You will not be exempt if you just have a general power of disposal.

Your charity is an exempt charity

Your charity is not required to follow steps 5 and 6 set out above. However, you may have to follow different requirements set out by your principal regulator and you will need to check this.

Releasing a rentcharge

A rentcharge is an annual payment to a person who does not own the land or have any other legal interest in it. If your charity owns a rentcharge of £10 or more, we encourage you to negotiate for its release as they can be difficult to collect and the amount of a rentcharge often bears no relation to the value of the land.

You do not need to follow [steps 5 and 6 if you release a rentcharge for a payment of ten or more times its annual amount.

Disposing of an advowson

You can dispose of an advowson without following steps 5 and 6.

A charity that owns an advowson has the right to nominate a suitably qualified candidate as a vicar or parson of a parish to the bishop of the diocese.

Disposing of designated land

This section covers:

• what designated land is
• when you need Charity Commission authority to dispose of designated land
• if you need authority, how to apply
• giving public notice
• using the proceeds of disposal

What is ‘designated land’

Designated land is land that must be used for a particular purpose or purposes of your charity according to the document that explains how the land must be used. This will be the ‘governing document’.

For example:

• property which must be used as a recreation ground, or
• a building which must be used as a school

Designated land may be ‘specie’ land; it may also be permanent endowment.

To find out if your charity has designated land look at the terms of the documents that explain how the land must be used, for example wills, conveyances or trust deeds.

These will set out important instructions on how to use and manage the land. They may also include instructions about:

• disposing of the land
• how any proceeds may be used

You should take professional advice if you are unsure whether your charity has designated land, what powers you have to dispose of the land and how you may use the proceeds.

Before you make a final decision to dispose of designated land you should, in most cases, consult:

• your charity’s beneficiaries, and
• anyone else who may be affected by the disposal

You should consider their views when making your decision.

The decision to dispose must be in your charity’s best interests. Use ourÌýdecision-making guidanceÌýto help you.

When disposing of designated land:

• you must comply with steps 1 to 3, as explained in the guidance above
• you must obtain Commission authority unless you can go ahead without it, as explained in this section of the guidance
• you must comply with steps 5 and 6 as explained above, unless an exemption applies
• you may need to comply with the rules on giving public notice, as explained below

When you do not need Commission authority

You do not need Commission authority to dispose if:

(1) you will use the proceeds of the sale or lease to replace the designated land with equivalent land which will be used for the same charitable purposes

(2) disposing of the land will not impact on the purpose for which the land is required to be used or how the charity furthers its purpose. For example, where only a small portion of the land is to be disposed of, or you are granting an easement or public right of way

In either of these circumstances, you can start the process to sell or lease or in some other way dispose of the land. Make sure you read the rest of this guidance to follow the general requirements, such as getting a report on the land. ÌýÌý

When you must get Commission authority

You must get Commission authority if:

• neither circumstanceÌý(1) norÌý(2) above apply to your disposal
• your governing document does not include a power to dispose of the land

You must have received Commission authority before you start the process of disposing.

The authority you need is about changing the purposes of the designated land.

This is because you can no longer carry out the charity’s purpose without the land.

Disposing of the land after receiving Commission authority

Once you have received Commission authority to your new purposes, you can start the process of disposing of the land. ÌýMake sure you read the rest of this guidance to follow the general requirements, such as getting a report on the land.

Giving public notice of your plans before you dispose of designated land

You must give public notice of your plans before disposing of designated land, or agreeing to dispose, unless:

• the land is being replaced
• you have received Commission authority to change the purposes of the designated land, and the land is now no longer designated (see preceding section above)

Your notice must:

• provide details of the land
• explain how you want to dispose of the land
• invite people to contact you with any objections or comments
• give people a minimum of one month to contact you

You should try to reach as many of your charity’s beneficiaries as is reasonably possible.

You can match your approach to your charity’s circumstances. For example:

• a small, community-based charity advertising in a local newspaper or by a notice fixed to the property
• a larger charity choosing a national newspaper, its website and social media
• a charity specialising in a specific activity advertising in a specialised publication, its website and social media

You canÌýapply for Commission authorityÌýnot to give public notice of the disposal where it is clearly in the charity’s best interests. For example:

• the governing document says that you need to do something more than give public notice, such as holding a public meeting
• you have already consulted widely about the proposal, for example if you consulted before you made your decision to dispose and you do not consider that views have changed

You should consider the feedback you receive, with other relevant information, before you start disposing of the land.

Proceeds of disposal

If you changed the purposes of the designated land and received Commission authority, the new purposes govern and explain how you must use the proceeds.

If you have disposed of designated land asÌýdescribed in (1) and (2)Ìýabove, and you have proceeds, the governing document may set out how to use them, for example on the repair and upkeep of the replacement, or existing, property.

If the governing document does not set out how to use the proceeds, you will need Commission authority to change the purposes of the proceeds to suitable new purposes. For example, the repair and upkeep of the replacement, or existing, property.

Read guidance aboutÌýchanging governing documents.

Seek professional advice if you are not sure.

Statements and certificates you must make

For all disposals (except advowsons and certain rent charges) you must make certain statements and certificates in your disposal documents, which state:

• how the land is held and by what sort of charity
• how the disposal is allowed by law

Your solicitor or other professional adviser will usually draft all the documents for the disposal. They must make sure the statements and certificates use the correct wording. The Land RegistryÌýPractice GuideÌýgives further detail.

If you are disposing of land which is vested in the Official Custodian for Charities then they must be named on any conveyance, lease or other disposal document. ReadÌýwhat needs to be done when land vested in the Official Custodian is disposed of.

Summary of the steps

This summary sets out the key steps for most disposals in this guidance. Don’t just rely on this summary. Make sure you read the full guidance.

Step 1. Be certain that your charity owns the land.

You can check this with the Land Registry.

Step 2. Be certain that the disposal in in your charity’s best interests.

You must make sure that your decisions are in your charity’s best interests.

Step 3. Check that you have a power to dispose of the land.

You must have a power to dispose before you go ahead.

Step 4. Check if you need Charity Commission authority.

If you:

• do not follow steps 5 and 6 and an exemptions does not apply, you must always have authority
• are disposing of land to a connected person you must always have authority
• are disposing of designated land you will usually need authority

Step 5. Get and consider a report on the land, unless the disposal falls within a specific exemption.

The type of report you need depends on how you are disposing of the land.

Step 6. Be satisfied that the proposed terms of the disposal are the best you can reasonably obtain for your charity.

Consider the report on the land and keep a clear record of your decision-making.

Legal note

The main laws relevant to this guidance are:

. This sets out for most charities a power to dispose of their land,