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The National Trust was wrong to sell a 17th century property in St. Ouen for £1.5m privately last summer without putting it on the open market, an investigation by the charity watchdog has concluded.
Jersey Charity Commissioner John Mills CBE said that the private sale had lacked transparency, therefore the Trust could not demonstrate that it had achieved the best value for the granite cottage in Route de Trodez.
Although maintaining that the private deal represented the best value, the National Trust concedes that an open tender would have been more transparent, and it says it will only sell properties this way in future.
Mr Mills initiated his investigation after the Trust was criticised for the sale of ‘La Ronce’, which the charity announced last August after it had received an ‘unsolicited offer’.
It said the proceeds for the sale would be used to refurbish two other properties in its estate.
After the sale was announced, a number of islanders criticised the process and questioned whether the agreed price was a fair one for such a historic granite property in the countryside.
But National Trust Chief Executive Officer Charles Alluto said that it had always been the intention to sell the property, which it purchased in 1987 for £117,000, to raise money to fund other projects.
Now Mr Mills – whose office regulates charities in the island – has published his investigation, which was sparked by the public criticism.
In a statement, he said: “The heart of the matter was whether a sale by private treaty, however seemingly justified as to best value both by policy and through valuations requested from local estate agents, could ever serve the best interests of the charity, compared with a normal open market process.
Pictured: National Trust CEO Charles Alluto had already conceded that 'lessons had been learned' from the private sale of La Ronce.
“This consideration was perhaps heightened given the special character of the property in question. [Mr Alluto’s] post hoc statement was certainly, in the Commissioner’s view, a helpfully frank thing for him to have said but it was after the event.
“Even if the Trust took the view, which it did (and still does) that the sale price was good having regard to all relevant factors, including the state of the property market, as viewed at the time, there was left, in the Commissioner’s view, scope for the perception that it, the Trust, could not have been sure about that and could have demonstrated it beyond doubt only through an open market process.”
He added: “The Trust explained to the Commissioner its reasons for pursuing the approach which it did, which included a desire for certainty in respect of a property which had been marketed before but without success, the prospect of the imposition of certain restrictive covenants as a condition of sale in order to protect the building’s principal historic features, and the importance of securing fresh funds to meet the needs of key projects in train.
“These in themselves were not unreasonable considerations but they did not address the fundamental point that transparency had not been assured and thus best value from the sale not demonstrated.
“From the perspective of protecting public trust and confidence this would not, it seemed to the Commissioner, be the best place in which for any registered charity to find itself.”
Mr Mills said he welcomed the Trust’s decision to put a new policy in place requiring all future sales to be open market procedures managed by third party professionals.
He added that he had come to the view from the materials which he reviewed that some weaknesses of governance were apparent in the way the Trust went about decision-making on the sale, over and above the question of transparency.
“These included a seeming degree of unclearness in its rules and policies as to what type of property it judged it felt empowered to sell, and less than wholly satisfactory procedures for ensuring that at both Council and management levels perceived or actual conflicts of interest arising from a property contract were declared, recorded and addressed,” he said.
Mr Mills said that he had been assured that the Trust had now introduced a modern conflicts of interest policy and register, and “taken stock” of the way in which it categorises properties as either ‘heritage’ or ‘investment’.
In response to the investigation, the National Trust said: “[We] note the Commissioner’s observations regarding the sale of La Ronce and of our own volition has implemented a number of policies to actively address his concerns. The Council is grateful to the Commissioner for his input and feedback in respect of its revised policies.
It added: The Trust’s Council remains of the view that the sale of La Ronce was essential to release much needed equity for the repair and refurbishment of the historic buildings in its care.
“The Council believes that the price achieved represented good value and was based upon independent professional valuations at the time of the offer.
“The price also significantly exceeded the increase in the Jersey House Price Index since the previous professional valuations secured 12 months earlier.
“However, the Trust’s Council acknowledges that greater transparency would have been afforded if the property had been placed on the open market and will ensure that such procedures are followed for any future disposals.
“Finally, the Trust’s Council notes the Commissioner’s concluding remarks namely “in his view, the responses and changes outlined, and their communication to members and to the public in the manner described, along with the constructive exchanges that he has had with members of the Council of the Trust, represent a satisfactory outcome to the episode. His dossier is now closed.”
Trust says 'lessons learned' from £1.5m sale of listed property
Trust sells 17th century cottage for £1.5m to fund repairs elsewhere
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