Discussing UK law. Links: swarb.co.uk | law-index | Acts | Members Image galleries

Charity Cut Price Sale.

Re: Charity Cut Price Sale.

Postby dls » Mon Nov 14, 2016 1:05 pm

From the guide issued by HMLR
Non-exempt charities need to go through certain procedural steps before disposing of land (sections 117-121, 124 and 125 of the Charities Act 2011). This guide does not describe them in detail but they include, in most cases, taking advice from a qualified surveyor and, normally, advertising the proposed transaction. In the case of a charge to secure the repayment of a proposed loan or grant, the trustees must take advice on its necessity, its terms and the charity’s ability to repay on those terms and in the case of a charge to secure the discharge of any other proposed obligation whether it is reasonable for the charity trustees to undertake to discharge the obligation having regard to the charity’s purposes. When they have taken the prescribed steps then, provided that they have power under the trusts of the charity to make the disposal and the transaction is not in favour of a connected person (a term not confined to the trustees – see sections 117(2), 118 and 350-352 of the Charities Act 2011), the charity trustees or the charity can dispose of the land without an order of the Charity Commission or the court. In all other cases (subject to section 117(3) of the Charities Act 2011) such an order is required (which will be made by the Charity Commission, usually under section 105 of the Charities Act 2011).


Thus a disposition to an associated charity can take place at an undervalue if approval is first obtained from the Commission or the Court. An example would be where a charity is winding up, and transfers all its assets to a charity with similar objectives. There would not then be much point in being paid full whack.
David Swarbrick (Admin) dswarb@gmail.com - 0795 457 9992
User avatar
dls
Site Admin
 
Posts: 12013
Joined: Thu Nov 01, 2012 1:35 pm
Location: Brighouse, West Yorkshire

Re: Charity Cut Price Sale.

Postby Hairyloon » Mon Nov 14, 2016 1:15 pm

atticus wrote:Why does the OP think that the Charity Commission may have approved this transaction?

Because the previous charity that owned it was not able to sell the land without approval from the Charity Commission.

dls wrote:Thus a disposition to an associated charity can take place at an undervalue if approval is first obtained from the Commission or the Court. An example would be where a charity is winding up, and transfers all its assets to a charity with similar objectives. There would not then be much point in being paid full whack.


That was what was intended to happen, but the Charity Commission did not allow it. Instead, they gave it to a charity with incompatible objectives who sold it cheap to a property developer.
Take me to your lizard...
User avatar
Hairyloon
 
Posts: 9706
Joined: Thu Nov 01, 2012 3:12 pm
Location: From there to here and here to there... Funny things are everywhere.

Re: Charity Cut Price Sale.

Postby atticus » Mon Nov 14, 2016 1:19 pm

Did the Charity Commission approve that second sale? Isn't that the one to question, although it may reopen the first.
User avatar
atticus
 
Posts: 19192
Joined: Sun Nov 11, 2012 2:27 pm
Location: E&W

Re: Charity Cut Price Sale.

Postby Hairyloon » Mon Nov 14, 2016 1:56 pm

The second sale it the one we are discussing. There was no first sale: the "they" in my post refers to the Charity Commission. My apologies for lack of clarity.
Take me to your lizard...
User avatar
Hairyloon
 
Posts: 9706
Joined: Thu Nov 01, 2012 3:12 pm
Location: From there to here and here to there... Funny things are everywhere.

Re: Charity Cut Price Sale.

Postby Hairyloon » Mon Nov 21, 2016 1:02 pm

The latest information I have appears to suggest that they sold the land, on the advice, but without the authority of the Charity Commission.
What might be the likely consequence of that?
Might the sale be voided? Return the land to the charity and refund the money paid, that seems to be the simplest solution and puts everything back as it should be.
The buyer might lose out on legal fees and other costs, but that would seem to me to be compatible with the principle of caveat emptor: they knew it was a charity they were buying form, they ought to know the rules about charity land.
Take me to your lizard...
User avatar
Hairyloon
 
Posts: 9706
Joined: Thu Nov 01, 2012 3:12 pm
Location: From there to here and here to there... Funny things are everywhere.

Re: Charity Cut Price Sale.

Postby atticus » Mon Nov 21, 2016 1:26 pm

much depends on the standing in all this of the person seeking to achieve something.

Reference to the Charity Commission still seems a good and proper first step.
User avatar
atticus
 
Posts: 19192
Joined: Sun Nov 11, 2012 2:27 pm
Location: E&W

Re: Charity Cut Price Sale.

Postby Hairyloon » Mon Nov 21, 2016 2:11 pm

atticus wrote:much depends on the standing in all this of the person seeking to achieve something.

Persons connected with Charity A seek to achieve something compatible with the aims of Charity A; Company C seeks to achieve a tidy profit, and we are all at a loss a to what charity B seeks to achieve.

Reference to the Charity Commission still seems a good and proper first step.

Even though all this appears to largely be their fault? They are looking into things... at their own pace. ;)
Take me to your lizard...
User avatar
Hairyloon
 
Posts: 9706
Joined: Thu Nov 01, 2012 3:12 pm
Location: From there to here and here to there... Funny things are everywhere.

Re: Charity Cut Price Sale.

Postby atticus » Mon Nov 21, 2016 2:20 pm

What is the nature of the connection?

Do "we" have a "connection"?

Am I right to think A sold to B, who sold on to C?

Are the connections to A or B?
User avatar
atticus
 
Posts: 19192
Joined: Sun Nov 11, 2012 2:27 pm
Location: E&W

Re: Charity Cut Price Sale.

Postby Hairyloon » Mon Nov 21, 2016 2:35 pm

atticus wrote:What is the nature of the connection?

They were (are?) trustees, but Charity A wound down. They are connected to (members of?) a new charitable body with aims compatible with charity A.

Am I right to think A sold to B, who sold on to C?

The Charity Commission gifted it to B.

Are the connections to A or B?

Concerned people were (are?) connected to charity A, charity A was connected to charity B.
Apologies for lack of details, but this is to comply with the purpose of the "no names" rule.
Take me to your lizard...
User avatar
Hairyloon
 
Posts: 9706
Joined: Thu Nov 01, 2012 3:12 pm
Location: From there to here and here to there... Funny things are everywhere.

Re: Charity Cut Price Sale.

Postby atticus » Mon Nov 21, 2016 2:40 pm

Was A 'wound down' before the transfer to B, or after?
User avatar
atticus
 
Posts: 19192
Joined: Sun Nov 11, 2012 2:27 pm
Location: E&W

PreviousNext

Return to Trusts/Equity/Charity

Who is online

Users browsing this forum: No registered users and 1 guest