The Charity Commission is investigating agreements entered into by charities where the property is, or appears to be, empty. The Commission is aware that landlords are approaching charities, and charities are actively marketing their willingness, to enter into tenancy agreements of hard to let property, thereby relieving landlords of the requirement to pay full business rates.

The Commission was made aware of these agreements by a number of local authorities who consider that they may amount to business rates avoidance by landlords. The Commission has warned charity trustees about the potential risks if they have not followed a proper and reasonable decision making process before entering into tenancy agreements for empty premises and if their charity does not physically occupy the premises.

Charities that have entered into such arrangements need to consider the Commission's investigation and may wish to seek advice on any legal, financial and reputation risks should local authorities or the Commission challenge individual arrangements.