Charity enquiries published by the Charity Commission are always a good source of material to learn what not to do as a trustee A recent enquiry which took over 5 years to report due to the complexity of the case is a prime example.. In summary the investigation revealed that actions or lack of actions and various disputes among the trustee body potentially cost the charity hundreds of thousands of pounds by virtue of a property deal that was undervalued at the time. The end result was that the charity became unable to act retrospectively because of the uncertainty of success and the costs involved which had already exceeded 250K . Various trustees were heavily criticised by the enquiry
One lesson that must be taken on board by trustees is that when you are dealing with land and property these are major transactions for any charity whether buying or selling and there are no shortcuts .Even if you believe that you have as trustees the necessary expertise on the board a failure to take independent advice may leave you personally liable in an unincorporated charity and potentially liable even with limited liability as you have failed to take reasonable steps .
Guidance from the Charity Commission states “For most disposals involving a sale, lease or other disposal of an interest in land, the law requires that charity trustees obtain and consider a written report from a qualified surveyor, advertise the disposal following advice from the surveyor, and decide whether they are satisfied that the proposed terms are the best that can reasonably be obtained in the circumstances of the disposal. The surveyor must be appropriately qualified, and the charity trustees must follow his or her advice on how to market the disposal (or not, if that is the advice).”
As an adjunct to this investigation one finding was that the constitution was both out of date and not fit for purpose which is an article for another occasion!
