The COVID-19 frequently asked questions (FAQs) have been available from the COVID-19 page of TMCP’s website since mid-March and explore general practical issues that face Managing Trustees given the impact of COVID-19.
The second set of COVID-19 FAQs (FAQ 4 to FAQ 8 inclusive) focus on non-residential leases e.g. where Managing Trustees grant a lease of part of their church building or other premises owned by the Church to a third party. The COVID-19 outbreak is making it very difficult for tenants and landlords alike to fulfil their obligations under leases and these FAQs pick up on some of the common challenges facing Managing Trustees.
Where answers suggest that Managing Trustees should speak to a solicitor, we are aware that these are very uncertain times and Managing Trustees are concerned about the financial implications of such advice. Please feel free to speak to TMCP Legal first if you are unsure whether an issue needs to be referred to a solicitor so that we can see whether we can do anything to help, whether you can take any steps to reduce the paid external assistance you may require; perhaps focussing on a specific question or issue with a view to saving costs, and also confirm where paid external assistance is a prudent use of charity funds.
We will keep these FAQs updated but please note that the situation evolves each day and the guidance is subject to further changes in Government guidelines over the coming weeks. The “updated” date at the top of the COVID-19 FAQs page on TMCP’s website indicates when the FAQs were last updated. If you are unsure whether something has changed, please contact us (see below).
The non-residential lease COVID-19 FAQs cover the following questions:
FAQ 4 - Tenant requests due to COVID-19
- We rent out part of our premises to a business tenant who has indicated that they will struggle to pay rent going forward due to the impact of coronavirus. Do we have to release them from the lease or agree rent concessions? Can we do this under charity law and Methodist law and policy? (FAQ 4)
FAQ 5 - Leases – Rent payments
- We have a number of investment properties which we let out. This income is crucial to the Mission work that we carry out. One of our tenants has sent us a letter from their solicitor requesting that we reduce the rent or allow a rent holiday. What should we consider in deciding whether to grant these types of concession? (FAQ 5.1)
- We let out shop premises to a commercial tenant. The tenant has approached us asking for a rent holiday due to the impact of COVID-19 on their business. We know they are struggling and would like to help if possible, however, are we able to do so under charity law and Methodist law and policy? (FAQ 5.2)
- We have seen the announcements in the media about protection from eviction for business tenants. The tenant of our church hall is a charitable organisation that is now unable to continue with its work due to the Coronavirus. Are we allowed to be flexible in terms of rent payment? The charity wishes to keep their lease so that they can continue their work once the restrictions are lifted. They have suggested being given a rent free period or paying a reduced rent. (FAQ 5.3)
- We are Managing Trustees of a small shop that was left to the Local Church in a will many years ago. Our current business tenant runs a number of shops and has asked us for a rent holiday or reduction in the rent due to coronavirus. What is our position if we do not agree to these concessions? (FAQ 5.4)
- We are Managing Trustees of a small shop that was left to the Local Church in a will many years ago. Our current business tenant runs a number of shops and has asked us for a rent holiday or reduction in the rent due to coronavirus. If we do agree to rent concessions, how should we proceed? (FAQ 5.5)
FAQ 6 - Leases – Termination due to COVID-19
- We let out a garage which forms part of our premises as a car repair shop to a sole-trader. Our tenant has asked us to terminate the lease as he has been forced to close due to the latest Government announcements and has already had to lay off his employees. Can we simply agree to this; we have little choice. He simply cannot pay the rent? We are a small community and want to do what we can to help this family business. (FAQ 6.1)
FAQ 7 - Landlord obligations under a lease – services and communal space
- We let out our old Sunday school to a pre-school who continue to provide care for key workers. They have told us that they will continue to operate for the time being. One of the church stewards is concerned as we have been told to close the building and nobody else is using the premises anymore. She thinks it would be easier just to terminate the lease. Should we terminate the lease? (FAQ 6.2)
- We let out office space to a couple of small businesses. Under the lease there are communal areas and we have to perform a number of services including cleaning. We are usually happy to do this and enjoy the interaction with our tenants. However, can we continue to do this given the dangers posed by the coronavirus? Should we stop the tenants from using the communal areas including access to the offices? (FAQ 7.1)
If you have any specific questions not covered in the FAQs or need any further assistance then do not hesitate to contact us by email or by telephone using the telephone numbers which you will have at the foot of emails received from members of the Legal team.
Managing Trustees are also encouraged to refer to the external links set out in the “External Links” section of the COVID-19 page for helpful guidance from the Government and the Methodist Church in Great Britain (https://www.methodist.org.uk/coronavirus/).
We continue to wish you and yours well and hope you all stay safe at this difficult time.