Section A – Introduction
Many Managing Trustees are receiving requests from tenants of their residential properties to reduce or even suspend rental payments during the COVID-19 outbreak. These are exceptional times and Managing Trustees will find help and guidance for dealing with these types of requests from their tenants in COVID-19 FAQ 9.1 and the FAQs section of the AST Side-Letter Questionnaire (Questionnaire). In particular, please bear in mind that as prudent charity trustees and in accordance with Methodist Church best practice, Managing Trustees are not encouraged to offer any concessions themselves.
Sintons LLP, one of the law firms on the Methodist panel, have offered to help Managing Trustees who wish to agree rental concession by making a service available to them to help document these temporary arrangements as cost effectively as possible. Sintons will produce a letter documenting the temporary arrangements that have been agreed between Managing Trustees and their tenants (AST Side-Letter) for a fixed fee of £200 plus VAT. A Questionnaire has been designed specifically for this purpose which allows Managing Trustees to provide all the information required to allow Sintons to legally document the temporary arrangement. The fixed fee has been agreed on the basis that Managing Trustees complete the Questionnaire in full and provide a copy of the competed assured shorthold tenancy agreement (AST). Please refer to the Newshub article “Payment of rent concerns raised by tenants” for further details.
The service is available where:
- Managing Trustees (together with TMCP) are the landlord of residential property held on the Model Trusts under a standard Assured Shorthold Tenancy (AST).
- Managing Trustees’ tenants have indicated they are unable to meet some, or all of their rent as a consequence of COVID-19 and having considered the points in FAQ 9.1 the Managing Trustees have decided to accommodate such a request.
- There are no rent arrears which have arisen prior to COVID-19; and
- There are no ongoing or pending eviction proceedings (court action).
This process note sets out the steps to be taken if Managing Trustees are minded to agree rental concessions and decide to use the service that has been offered by Sintons to produce a letter documenting the temporary arrangements with residential tenants (see below). Managing Trustees can of course use a different solicitor. If Managing Trustees want to use a different solicitor then they should refer to the process referred to in COVID-19 FAQ 9.2 and contact TMCP so that we can approve the document recording the temporary arrangements.
Please refer to the Non-Residential Lease Concession Process Chart for details of the process that is being offered by Blake Morgan LLP in relation to similar rent concessions with non-residential tenants who occupy Methodist Model Trust property under a lease.
Section B – Process Chart
This process is to be followed where Managing Trustees wish to use the service offered by Sintons to produce an AST Side-Letter:
Complete the AST Side-Letter Questionnaire (Questionnaire) to provide Sintons LLP with all the information they require to document the temporary arrangement agreed between Managing Trustees and their tenant(s):
The Questionnaire is available using this link: AST Side-Letter Questionnaire
Contact TMCP Legal for help in completing the information required in the Questionnaire if you do not understand what information you need to provide or need assistance.
Send the completed Questionnaire to BOTH firstname.lastname@example.org and email@example.com (along with a completed copy of the AST).
Sintons will document the concessions Managing Trustees have agreed with their tenant(s) as set out in the completed Questionnaire and send a copy of the draft AST Side-Letter to the Managing Trustees for approval (copying in TMCP Legal).
=> proceed to Step 5.
Approve the AST Side-Letter – Managing Trustees.
Approve the AST Side-Letter – TMCP.
Sintons will produce the final form of AST Side-Letter ready to be signed by the Managing Trustees, their tenant(s) and any guarantor(s) and send this to the Managing Trustees (copying in TMCP).
The Managing Trustees can now enter into the agreed form of AST Side-Letter and allow the varied rent to be paid (or suspended) in accordance with its terms:
Managing Trustees need to bear in mind that immediately at the end of the period provided for in the AST Side-Letter, the arrangements with the tenant(s) must return to normal. If there is a need to vary the arrangements again at that time, contact TMCP Legal as a matter of urgency.
Section C – Further Guidance
Managing Trustees may find the following guidance notes and documents of assistance:
- COVID-19 FAQs (FAQs 9 to 13 inclusive – relate specifically to residential tenancies ).
- AST Side-Letter Questionnaire
- Newshub Article - “Payment of rent concerns raised by tenants”
If you have any queries in relation to the guidance in this document please contact TMCP Legal for further assistance.