Section A - Introduction
This guidance provides information on using Methodist residential property to house refugees under the Syrian Vulnerable Person Resettlement Programme (VPR).
Please read this guide alongside the detailed guidance notes on standard residential tenancies available from the Residential Tenancies page on TMCP’s website. This sets out the charity law and Methodist law and policy requirements to be fulfilled before standard tenancies can be entered and applies to VPR tenancies except as specifically modified by the guidance in this note. Please contact TMCP Legal for help on satisfying the charity law and Methodist law and policy requirements within the timescales.
A1 – The Syrian Vulnerable Person Resettlement Programme
The VPR programme was launched in January 2014. In July 2017 the Government took the decision to expand the scope of the scheme to include other refugees who have fled the conflict in Syria but do not have Syrian nationality.
The VPR programme provides funding to cover costs of resettlement, which includes the costs of private rented accommodation at Local Housing Authority Rates (often below the market rate and therefore likely to be at an ‘undervalue’). Given the scarce supply of social and affordable private sector housing, Managing Trustees can make a huge contribution by offering available Methodist residential properties to refugees.
A2 – Methodist Policy
The Methodist Council at its October 2015 meeting agreed to amend its policy on leasing at an undervalue. This change in policy was in response to the refugee crisis. The Methodist Council agreed that residential Methodist property can be let for less than the full market rent in exceptional circumstances provided that the Managing Trustees are able to show that the purposes of the Methodist Church are being furthered. The Conference accepted a Memorial in 2017 which removed the need for the consent of the Methodist Council to a letting of a residential property at an undervalue where it was under the VPR programme. Section B sets out the steps that now need to be taken before letting residential property at an undervalue under the VPR programme, in addition to the usual steps taken when letting out a residential property.
If the letting is not under the VPR programme, but it is proposed that a residential property is let at an undervalue for charitable purposes, the consent of the Methodist Council will still be required and the Conference Office (firstname.lastname@example.org) should be contacted to clarify the information required.
Section B – Initial Steps
B1 Should Managing Trustees make property available to house refugees under the VPR programme?
When deciding whether to offer a Manse or other property for use as part of the VPR Programme, Managing Trustees need to be careful that they are not taking on an obligation which currently rests with their Local Authority to house refugees. Managing Trustees may be able to explore other ways that they can work with the Local Authority to offer assistance for the benefit of refugees arriving in their area. There may be alternative ways which Church members could assist which could be of a more practical benefit to those in most need.
Full community sponsorship is a way that your local church or Circuit can get involved in supporting the resettlement of vulnerable people fleeing conflict. It is necessary to apply for approval as a community sponsor using the prescribed form.
B2 - Approaching your Local Authority
If you have a Manse that you are considering letting under the VPR programme, contact the relevant Local Authority’s housing department to check that the property you intend to make available is suitable, whether the Local Authority is looking for properties at the moment and to obtain further information to help the Managing Trustees decide whether to go ahead. It is understood that properties must be:
- a self-contained home with its own front door (i.e. not shared)
- available to rent for at least 12 months
- available for private letting at the Local Housing Allowance rate
Managing Trustees should always check what their Local Authority’s specific requirements are so that they can gauge whether the property is suitable and if not, what works they would need to carry out so that the property can be used under the VPR programme. Managing Trustees can then decide whether this is feasible given the nature of the works, costs and timescales involved and if they want to proceed. It is very likely that the requirements of the Local Authority will be markedly different from the requirements for a Methodist Manse.
Once Managing Trustees have established that their property is suitable for the programme and decided they want to proceed, they will need to establish the terms on which the Local Authority will be using the property. This is discussed in Section B3. If the Local Authority has produced its own letting (and any other) agreements to be entered into between the Managing Trustees and the family and/or Local Authority regarding use of the property, please ask for copies so that you can obtain advice on their suitability from your solicitors. TMCP can also provide guidance on any issues that may arise from a charity law and Methodist law and policy perspective.
B3 - Seek professional advice
As charity trustees, Managing Trustees have a duty to obtain professional advice under section 120 of the Charities Act 2011 to ensure that any letting is on; “the best terms that can reasonably be obtained”.
Local Authorities do not always structure their arrangements in the same way and it is important to establish what the Local Authority is proposing as this will impact on the steps to be taken. In some cases Managing Trustees enter into a tenancy agreement directly with the refugee family. In other scenarios Managing Trustees enter into a lease with the Local Authority who then sub-let to the refugee family. In such cases it is the Local Authority who takes responsibility for the family and the Managing Trustees’ relationship is simply with the Local Authority.
It is recommended that Managing Trustees ask their solicitors whether the Local Authority should agree to additional protections or change the proposed structure. Would the solicitor advise that the Local Authority should stand as guarantor for the tenant obligations in the tenancy agreement including the payment of rent? Does the solicitor recommend that a form of indemnity is obtained from the Local Authority against any loss suffered by Managing Trustees if they are unable to obtain vacant possession of the property and have to house a Minister elsewhere? Please note that these protections have already been offered by some Local Authorities and the Managing Trustees’ solicitors may be able to help negotiate the position with the Local Authority.
Managing Trustees would also need to take legal advice to ensure the occupation of the property was carefully documented so that after the agreed length of time, the property, if a Manse, could be vacated and returned to the Managing Trustees when required to house a Minister.
B4 – Checking the insurance position
Before taking any further steps Managing Trustees will need to contact their insurance company to notify them of their intention to let the property at an undervalue. It is essential that Managing Trustees are adequately insured and if the insurer raises any concerns or indicates that the undervalue letting will impact on the insurance policy this will need to be addressed.
B5 – Contact TMCP
As is the case with all tenancies, Managing Trustees should notify TMCP as soon as they have taken the decision to let (or re-let) property, under the VPR programme, giving TMCP at least two weeks’ notice where possible. Whilst a refugee family may not have been identified for resettlement at that stage, or the scheduled arrival date may be several weeks or even months away, there are steps that can be dealt with in readiness. Please refer to Section B of the Residential Tenancy (Landlord) Guidance and note the steps that are particular to VPR tenancies detailed in Section C of this guidance note.
In addition to the usual charity law and Methodist law and policy requirements set out in Section C, as an additional step please provide TMCP with the following:
- A valuation of market rent prepared by a local letting agent or surveyor. This is to establish whether the proposed tenancy is actually at an undervalue. In some cases the Local Authority is paying market rate. If that is the case then the requirements relating to a letting at an undervalue would not need to be followed. However, Managing Trustees would still need to be mindful of the other differences in the charity law and Methodist law and policy requirements for lettings to refugee families as set out in Section C of this guidance note.
- A copy of the resolution of the relevant managing trustee body confirming their acceptance that the letting will be at less than the market value and that they are content such a letting furthers the objectives of the Methodist Church and that the letting shall be under the VPR programme.
- Confirmation of how the letting will be structured / managed.
- Is the agreement going to be directly with the refugee family i.e. a normal Assured Shorthold Tenancy (AST) between the Managing Trustees and the tenant?
- Is the agreement going to be with the Local Authority, rather than the family itself, who will then “sub-let” to the refugee family? TMCP will provide specific guidance if this is the case but once the steps in this Section B have been followed Managing Trustees would follow the standard residential tenancy guidance bearing in mind that this is likely to be a “common law” tenancy rather than an AST and that the tenant would be the Local Authority with the usual requirements for connected persons etc. Please refer to the Residential Tenancies page and the Residential Tenancy (Landlord) Guidance.
- Confirmation that the Local Authority believes the property meets any criteria which must be met for a building to be deemed suitable to accommodate refugees or details of the works required to make the property suitable and the Managing Trustees’ proposals for this.
- Copies of any documents produced by the Local Authority that they intend to use to document the arrangement including any additional guarantees or indemnities.
Section C - Satisfaction of Charity Law and Methodist Law and Policy Requirements
Please bear in mind that although the consent of the Methodist Council is no longer required to the “undervalue” element, the other charity law and Methodist law and policy requirements that apply to all residential tenancies will still apply to a tenancy under the VPR programme except as varied by the guidance in this Section C.
For ease of reference and to summaries the difference in requirements for standard tenancies and those under the VPR programme, this Section C follows the order of requirements in the Residential Tenancy (Landlord) Checklist.
TMCP as custodian trustee can only concur with the tenancy once all of the charity law and Methodist law, policy and best practice requirements that do apply have been fulfilled. Please contact TMCP Legal if you have any questions so that TMCP can help you to work through the requirements as they apply to the VPR programme.
C1 - Final Consent (Standing Order 930(4)(ii))
As with all residential tenancies, a project needs to be logged on the Property Consents Management System (Consents Website) and Final consent will need to be in place before the tenancy is entered into. This should be done as early as possible to prevent delays further down the line.
C2 - Confirmation of market rent and best terms letter (s.120(2)(b) of the 2011 Act)
As discussed in Section B, tenancies under the VPR programme can be at an undervalue. Although confirmation of market rent is not required, please provide TMCP with a copy of the resolution passed by the Managing Trustee body authorising the letting at an undervalue as discussed in Section B.
To satisfy the requirement for confirmation of “best terms” (other than rent), please ask your solicitors to provide TMCP with this confirmation e.g. a copy of the advice that they have provided to the Managing Trustees further to the professional advice discussed in Section B3. Is the structure of the arrangement and the deal on the table in the best interests of the charity? Could the Managing Trustees have negotiated any additional security e.g. guarantee or agreements with regard to void periods?
C3 Connected Persons (s.117(2)(a) of the 2011 Act)
Confirmation is required as to whether the tenant is “connected” to the charity within the meaning of s.118 of the 2011 Act and guidance is provided in Section C2 of the Residential Tenancy (Landlord) Guidance. Details of what is meant by the term “connected persons” is set out in the Connected Person Certificate.
In the case of tenancies under the VPR programme, the identity of the tenants is not always known to the Managing Trustees until the tenants arrive and it will not always be possible for Managing Trustees to arrange for the Connected Person Certificate to be signed or obtain confirmation of whether or not the tenant is a “connected” person as defined in Section 118 of the Charities Act 2011, before the tenancy is entered into.
If the identity of the tenant will not be known in advance and/or it will not be possible to have the certificate prepared and signed before the tenancy agreement is entered into, then the Managing Trustees will need to notify TMCP accordingly. The requirement will be deemed satisfied if the Managing Trustees provide written confirmation (email is sufficient) that appropriate enquiries have been made and there are no conceivable connections for the purposes of s.118 of the Charities Act 2011 between the charity and anybody from the area from where the refugee family will be coming. VPR tenancies can be treated on this basis as the family is coming from overseas, has been selected by a third party (the Local Authority) for housing in the property and the remote chance of the tenant(s) being “connected” persons for the purposes of s.118 of the Charities Act 2011.
Please note that if the tenant did turn out to be a “connected” person then you would need to obtain a Charity Commission Order as a matter of urgency.
C4 - Approval of the tenancy agreement/ AST (Standing Orders 930(3) & 931(3))
TMCP must approve the form of tenancy agreement before it can give approval in accordance with Standing Order 930(3) and 931(3) on behalf of the Connexional Team.
Although lettings are usually on the basis of an assured shorthold tenancy under the Housing Act 1988 (AST), and while Managing Trustees do usually enter into an AST directly with the refugee family, in some cases Managing Trustees enter into a lease with the Local Authority. Please refer to Section B3 and contact TMCP so that we can provide further guidance on the form of agreement and template clauses.
If the Managing Trustees are to enter into an AST with the refugee family directly then a template form of AST which already has the template clauses included is now available. Please contact TMCP so that a copy can be sent to you. This form of AST is suitable for tenancies under the VPR programme and the standard guidance in Section B3 and C3 of the Residential Tenancy (Landlord) Guidance is applicable. Please also refer to the Residential Tenancy Document Guide.
C5 - Deposit advice (to assist Managing Trustees to comply with statute)
If a deposit is being provided then the requirements in terms of the deposit and confirmation that the statutory requirements have been met would be required as with any other tenancy.
However, whilst it is generally considered best practice for Managing Trustees to request a deposit as security for the tenant’s obligations under the tenancy agreement, this is unlikely under the VPR programme and Managing Trustees will not be required to seek a deposit from the tenant.
The Local Authority may however offer alternative forms of security such as standing as guarantor for the tenant’s obligations under the agreement, providing rent payments pending the tenant having their owns means to pay or offering compensation for keeping the property empty pending the arrival of the refugee family. Please ask the Local Authority what schemes are available and discuss possibilities with your solicitor so that you can ensure the best interests of the charity are being protected. Please bear in mind that making sure the charity is protected does not detract from the fact that Managing Trustees are providing much needed accommodation for the Local Authority to use and anything agreed with the Local Authority should not impact on the tenants’ own enjoyment of the property or make life more difficult for them.
C6 - Statutory obligations (to assist Managing Trustees to comply with statute)
As with all residential tenancies Managing Trustees will need to make sure that they or their agents have fulfilled all statutory requirements that need to be satisfied before the tenancy is entered into except the requirements in relation to the “right to rent”. TMCP asks for confirmation of statutory compliance, for the Managing Trustees’ own protection, before the tenancy is entered into. Please see the Residential Tenancy (Statutory Requirements) Focus Note for details of the requirements and speak to your agent and/or solicitor.
In terms of the so called “Right to Rent” checks, Landlords are required to carry out immigration checks under the Immigration Act 2014 to verify their tenant’s immigration status and ensure that they have the “right” to rent. These are known as “Right to Rent” checks.
Given the complex immigration status of tenants under the VPR programme, please seek advice from your solicitors on how best to satisfy the requirements under the Immigration Act 2014. In many cases Local Authorities have provided written confirmation that the Right to Rent checks do not apply. Please provide a copy of the Local Authority’s confirmation to TMCP.
Section D Entering into the Residential Tenancy under VPR
D1 – General guidance
Please refer to Section D of the Residential Tenancy (Landlord) Guidance for general guidance on entering into the tenancy and ensuring that all the charity law and Methodist law and policy requirements have been met beforehand.
D2 Allowing the tenant(s) into occupation
As explained in Section D4 of the Residential Tenancy (Landlord) Guidance, Managing Trustees must ensure that NO tenants are allowed into occupation of Model Trust Property (or allowed to store items on the premises) before TMCP has approved the transaction in accordance with Standing Orders and an approved tenancy agreement has been signed by both parties. However, in the case of tenancies under VPR, it is sometimes the case that flights arrive late at night and Managing Trustees are told by the Local Authority that the tenancy agreement can only be entered into after the family have already taken occupation of the property. Managing Trustees would need to ask their solicitors to advise on how to accommodate the practicalities of the situation whilst protecting the best interests of the charity. Can alternative arrangements be made such as signing the documents in the presence of translators in advance of actual arrival? Can assurances be obtained from the Local Authority as to how the charity would be protected if there was any delay in the agreements being signed? Please contact TMCP setting out what the Local Authority is proposing and the advice of the solicitors.
D3 After the tenancy has been entered into
Please confirm with TMCP once the tenancy has been entered into and send them a copy of the signed tenancy agreement.
TMCP shall maintain a record of each letting under the VPR scheme and shall update the Conference Office on this record as and when requested.
Please help your residential tenancies to progress smoothly by:
- Letting TMCP know about proposed lettings as soon as possible i.e. when Managing Trustees first decide to make the property available for the VPR programme.
- Keeping TMCP informed of proposed moving in dates and highlighting this in correspondence.
- Using the extensive guidance that is available on the Residential Tenancies page on TMCP’s website.
If you have any queries in relation to the guidance in this document please contact TMCP Legal for further assistance.
Please note that this document is to provide guidance and assistance to Managing Trustees and their professional advisers. This guidance note is general in nature, may not reflect all recent legal developments and may not apply to the specific facts and circumstances of any particular matter.
Also note that nothing within the documents and guidance notes provided by TMCP nor any receipt or use of such information, should be construed or relied on as advertising or soliciting to provide any legal services. Nor does it create any solicitor-client relationship or provide any legal representation, advice or opinion whatsoever on behalf of TMCP or its employees.
Accordingly, neither TMCP nor its employees accept any responsibility for use of this document or action taken as a result of information provided in it.
Please remember that Managing Trustees need to take advice that is specific to the situation at hand. This document is not legal advice and is no substitute for such advice from Managing Trustees' own legal advisers.