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Null and void

If charities have not followed pre-sale procedures, contracts for the sale of land are worthless, says David Barnes

11 April 2003

Sam Goldwyn’s famous aphorism that a verbal contract is not worth the paper it’s written on has been given a new twist. In Bayoumi v Women’s Total Abstinence Educational Union Ltd [2003] EWHC 212 the High Court exposed a fundamental defect in the legislation regulating the disposal of land and buildings by charities. If the charity has not complied with the relevant statutory pre-sale procedures, neither party is bound by the contract and can resile at any time until completion. As it is unlikely third parties will be able to check for themselves that the procedures have been observed, charities may now face difficulties when disposing of surplus land and buildings. Pre-sale requirements: s 36 of the Charities Act 1993 Charity trustees must obtain and consider a written report from an independent, qualified surveyor and, based on consideration of that report, decide the proposed disposal terms are the best that can reasonably be obtained. Only then may the ch...

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