TMCP are often contacted by Managing Trustees across the Connexion contemplating redevelopment of existing buildings to create facilities which are more suitable for modern day mission objectives.
When TMCP is contacted we are able to provide guidance to Managing Trustees to assist them with the legal implications of their proposals.
TMCP are aware of schemes across the Connexion where Managing Trustees fund the redevelopment of existing site and the construction of new buildings in different ways. One example would be the sale of part of the existing site to a developer for uses including residential and commercial development. When contemplating this type of proposal Managing Trustees need to ensure that the first step they comply with is the preparation of a Qualified Surveyors Report (QSR). (Please refer to the QSR (Preparing) Focus Note and QSR Focus Note for the requirements of a QSR).
In addition to the usual requirements for a QSR, the Managing Trustees should ask their Surveyor to advise on the development potential of the site and consider not just the current proposals but also advise the Managing Trustees on any alternative options which may be appropriate in the particular circumstances.
Once the QSR has been prepared Managing Trustees should forward a copy to TMCP and one of the Legal Officers will provide guidance to the Managing Trustees to assist them in progressing the projects.
Redevelopment projects can offer an excellent way of adapting existing buildings to further mission in the twenty first century but are not for the faint-hearted! TMCP would urge Managing Trustees to get in touch early in the process and will work with them to provide guidance to ease the process and ensure that the proposals comply with the requirement of Charity Law and Methodist Law and Policy and best practice.
Once Managing Trustees have decided what it is they wish to do and the QSR has been approved by TMCP they may find the following guidance helpful in ensuring the smooth running of the project:
- Managing Trustees should check with their District whether a works project needs to be logged on the Methodist Property Consents Website. If the District requires a project to be logged then this must be done so that the three levels of consent can be entered. Works cannot commence until final consent is entered. Please confirm the project number once a project has been logged and ensure that this reference number is used in all correspondence with TMCP.
- If the Managing Trustees intend to enter into a “works” project, TMCP do not necessarily need to be involved nor are the Managing Trustees required to obtain TMCP’s approval of any documentation entered into. Contracts between Managing Trustees and their builders, surveyors, architects etc., are seen as being part of the Managing Trustees’ day to day control and management of the property. However, the Managing Trustees may choose to send a copy to TMCP and ask for guidance. Any Model Trust Fund money required would need to be requested online by making a payment request through the project.
- The Managing Trustees will of course need to obtain any required planning permissions and building regulation approvals for the works. Your professional team or the planning authority itself should be able to assist with ensuring compliance with planning legislation.
- As charity trustees, Managing Trustees are obliged under the Charities Act 2011 to act prudently and only in the best interests of the charity. This means that Managing Trustees should obtain the advice of professionals where required. Unless the managing trustee body includes surveyors, architects, planners and solicitors among their number who are willing to advise the Managing Trustees and accept any liability for the giving of such advice, it is highly recommended that Managing Trustees obtain the advice of an independent surveyor, architect and solicitor in relation to any sizeable building works. Although the Managing Trustees may consider that obtaining professional advice is an expensive luxury, the advice should help the Managing Trustees to drive the project forwards successfully and avoid the project getting into difficulties that would otherwise be time-consuming, costly and difficult to resolve. Acting on appropriate professional advice should also give the Managing Trustees the confidence that they are fulfilling their obligations as charity trustees and are indeed acting in the best interests of the charity. Please ensure that any professionals instructed have appropriate indemnity insurance.
- It is expected that Managing Trustees, as charity trustees, will negotiate the terms of any contract with their contractor and professional team keenly to ensure that it is in the best interests of the charity. Managing Trustees should usually obtain at least three quotes to help to ensure that they are paying a reasonable price for any proposed works. The Managing Trustees’ surveyor will be able to help them cost a project and recommend contractors to carry out the works. He or she will also be able to advise the Managing Trustees on the merits of various quotes and help the Managing Trustees to find a contractor with appropriate experience and reputation to carry out the proposed works. Whilst such a contractor may not be the cheapest, it is expected that the Managing Trustees will not be paying more than they should and the surveyor’s advice on the costings will be paramount.
- When the Managing Trustees have chosen a contractor it is expected that the parties will enter into a JCT contract and any required collateral warranties (see below). A JCT is the name often given to the standard form of building contract published by the Joint Contracts Tribunal. A JCT sets out the obligations of the contractor and the Managing Trustees as the “employer” party, and other issues such as insurance, dispute resolution and what happens if the contractor is unable to finish the job for whatever reason or the work is not to standard. Given the liability that Managing Trustees place themselves under on entering such contracts and the importance of the successful conclusion of the works to the Church, it is essential that advice is taken from the Managing Trustees’ surveyor and solicitor before any such contracts are entered into.
Detailed guidance on this topic is currently being drafted and will be available shortly on the TMCP website. In the interim if Managing Trustees would like further guidance please contact TMCP Legal.
From an article produced by TMCP Legal for Property Matters, issue 16, December 2016.