UK VPGA 8 of UK Red Book supplement effective 1 May 2024 deals with Valuation of charity assets
Reports are covered under separate headings depending on whether the report is for an acquisition or a sale/disposal
Acquisition reports are part 10 of UK VPGA 8.1
Content of reports (acquisitions)
10 Whether seeking advice from an internal or external designated adviser, the Commission recommends that the report includes advice on a reasonable price range for the land, or on the maximum bid the trustees should make at auction. The trustees should also be careful to ensure that the report covers all factors relevant to the proposed purchase.
These may include:
• a description of the land
• details of any planning permission needed
• a valuation of the land
• advice on the price that the trustees ought to offer to pay, or the maximum bid they ought to make at auction
• a description of any repairs or alterations the trustees would need to make and their estimated cost
• a positive recommendation (with reasons) that it is in the interests of the charity to purchase the land and
• anything else the surveyor thinks is relevant, including a description of any restrictive or other covenants to which the land is subject.
11 It is also recommended that the report includes a statement by the designated adviser that they have:
• the ability in, and experience of, the valuation of land of a similar kind in the area
• no interest which conflicts with or would appear to conflict with that of the charity.
See also government guidance for trustees also at https://www.gov.uk/government/publications/acquiring-land-cc33
Disposals reports are covered by part 15 of UK VPGA 8.2
Content of reports (disposals)
mirrors the requirements of the act: The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023 (legislation.gov.uk).
15 Previously under the Charities Act 2011, the content of an advisor’s report regarding charity land disposals was rigidly controlled. These prescriptive rules are now amended in the new Act, providing an advisor with more scope in their reporting to the charity trustees. The report should give advice concerning the following:
- the value of the relevant land
- any steps that could be taken to enhance that value
- whether, and if so how, the relevant land should be marketed
- anything else that could be done to ensure that the terms on which the disposition is made are the best that can reasonably be obtained for the charity and
- any other matters which the adviser believes should be drawn to the attention of the charity trustees.
16 The new Act also stipulates that an advisor must include a statement in the report that they have the appropriate experience and expertise to advise the charity on the valuation of land, and that they have no conflicts of interest with that of the charity.
An RICS member must also follow all relevant RICS standards (such as Red Book Global) and the Rules of Conduct and be a Registered Valuer
Subject to the nature of the work there may also be other professional and legal requirements, the Act and RICS standards note that appropriate experience and expertise (competence) are required.
See government guidance for trustees also at https://www.gov.uk/government/publications/sales-leases-transfers-or-mortgages-what-trustees-need-to-know-about-disposing-of-charity-land-cc28/sales-leases-transfers-or-mortgages-what-trustees-need-to-know-about-disposing-of-charity-land