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Jamie Huard
Partner
The Law Commission has published its much anticipated report on technical aspects of charity law including a fundamental review of the charity property law provisions and has proposed modernisation that will save the sector up to £2.8 million per annum.
Partner
Significant changes have been called for in the sector for a long time. The proposed changes include the following:
There are some significant conclusions reached from the consultation as highlighted in the Report, in particular the proposal to remove the property disposal restrictions entirely has been dropped. This is a significant acceptance that the current regime is a robust and effective one, with compliance monitored in an efficient way by the Land Registry. It is also recognition that disposals of property are not to be treated in the same way as disposals of other charity assets such as shares.
On the other hand, the Law Commission has not recommended applying these provisions to the acquisition of charity property. The justification for not applying this to acquisitions is not entirely consistent and best practice will still be to obtain similar advice on the purchase of any property. It was noted that the process for acquiring a property could become more protracted by imposing the same advice and compliance requirements, which could make a charity less attractive as a potential purchaser.
Overall, the changes seem to be a sensible modernisation of the current regime whilst retaining the best elements that help to maintain public trust in the system, protect trustees and focus their attention on their general obligations in relation to the governance of the charity and looking after its assets for its beneficiaries.
All content on this page is correct as of October 4, 2017.