COVID-19 and the ‘lockdown’ have thrown up a number of potential problems for tenants who are unable to work or are experiencing a reduction in their income. There are many people who are experiencing financial difficulties and TMCP has listened to the concerns raised with Managing Trustees by their tenants. As a Church we are sympathetic and want to help those in need.
In relation to those tenants in residential accommodation owned by the Church, TMCP have worked in collaboration with Sintons, one of the firms on the panel of solicitors, on a process which can be followed by Managing Trustees where they have received a request from their tenant who has a genuine concern about meeting their rental payments. The aim is to ensure that if Managing Trustees want to acquiesce to a request for a temporary suspension in payment of rent, or agree a reduction in rent, that such an agreement is documented legally without affecting the other terms of the tenancy/lease.
To that end TMCP and Sintons have produced a questionnaire which Managing Trustees can complete, detailing the reasons why they are agreeing to reduce or suspend the rent, setting out the length of the suspension/reduction and what the repayment terms will be once life returns to ‘normal’. The questionnaire can be found in the Trustee Documents (password protected) area of the TMCP website. If you do not have the password then you can email or call TMCP and we will provide you with the same.
Once the questionnaire has been completed it should be sent to TMCP and Sintons. Sintons will prepare a side letter for the Managing Trustees detailing what has been agreed, which can then be signed by the parties and kept with the original tenancy agreement/lease. Sintons have agreed to charge Managing Trustees £200 plus VAT for producing the side letter on the basis the questionnaire is completed correctly. To help keep costs down Managing Trustees can contact TMCP Legal if they are having difficulties in completing the questionnaire and we will provide as much assistance as necessary. TMCP have trained a number of its Legal team to deal with these enquiries to ensure the same are dealt with as a priority.
Managing Trustees who wish to use a different solicitor should refer to the process referred to in COVID-19 FAQ 9.2, available on the COVID-19 page of the TMCP website and contact TMCP so that we can approve the document recording the temporary arrangements.
There is also a step by step guide (the AST Concession Process Chart) available on the TMCP website which will help Managing Trustees in following the process and completing the questionnaire.
Please also refer to COVID-19 FAQ 9.1, which gives guidance on the types of questions Managing Trustees should ask before agreeing to a rent suspension or reduction.
It is important that any agreements to suspend or reduce rental payments during this difficult time are correctly documented to protect both parties and ensure that the other terms of the tenancy agreement/lease are not affected. It is also important to 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 but rather wait until an approach is made by a tenant and proper investigations have been made into the financial circumstances of all parties.
If you have any queries in relation to the guidance in this document please contact TMCP Legal for further assistance.