Registered charities must obtain an RICS Red Book valuation from a suitably qualified Chartered Surveyor before entering into a transaction for disposal. This includes selling, letting and also the granting of new rights. Sections 117 to 121 of the Charities Act 2011 outline the procedure that ensures the disposal is on the best terms reasonably possible in terms of value.
The procedures do not apply to ‘exempt’ charities that are not registered at the Charity Commission but they do apply to charities that are not registered but are still subject to Charities Act 2011 provisions. This includes scout groups and some places of worship.
From a valuation perspective, compliance with the Red Book is likely to be something that the surveyor is well versed in as this governance covers the vast majority of valuation work that they will undertake including disposal, acquisition, taxation, & disputes such in matrimonial proceedings.
The surveyor will be duty bound to state that they are appropriately qualified and have the competence and expertise in terms of valuing the property type and have an understanding of the local market. The Valuer will also confirm that they have no conflicts of interest and that their opinion will be unbiased and impartial along with any necessary assumptions. For example, whilst the surveyor will inspect the property internally and externally, they will not undertake a building survey and as such the investigation will not be as in depth. Their primary concern is to establish the condition of the property and the surrounding factors that impact on value.
Other examples include not testing the electrics (they are not electricians) and assuming that the property has good registered title (they are not solicitors), but ultimately these follow a similar procedure for all Red Book valuations and are not themselves only applicable to a Charities Act valuation. The report itself will detail the comparable sales evidence used to enable the client to clearly understand how they have arrived at their final valuation along with commentary of the local market.
Our Chartered Surveyors have vast experience in the requirements of the RICS Red Book and how they apply to valuations of this nature. If you require advice on the subject or wish to enquire about instructing a surveyor for a valuation, please either by email or call us on 020 7183 2578.
