| These Non-Residential Lease (Landlord) Ancillary Template Clauses were last updated on 2nd April 2024 following the third tranche of reforms made to the Charities Act 2011 which came into force on 7th March 2024. The updates relate to the charity statements required on a disposition. |
These Template Clauses are for use when the Church as landlord under a non-residential lease is asked by the tenant for consent; (1) to assign the lease; (2) underlet; or (3) to carry out works. When preparing the licence to assign you may find the Non-Residential Lease (Landlord) Guidance for Solicitors of assistance.
Although similar, there are differences between the Template Clauses that need to be incorporated in licences to; (1) assign; (2) underlet; and (3) carry out works. The key below and the letters in square brackets preceding each Template Clause indicate which clauses are required for each document type:
| Licence to assign: | A | Licence to underlet: | U | Licence to carry out works: | W |
The only amendments that should be made to the Template Clauses, unless indicated otherwise, are amendments to the terminology used to ensure that it correlates with the terminology used in the rest of the licence.
| Please note that these are template “clauses” only and do not constitute an agreement in their own right. Please ensure that the required Template Clauses are inserted into the firm’s own precedent agreement (or incorporate the Template Clauses in a bespoke document) so that the finished agreement is complete and protects the best interest of the charity. |
1. Front Page
On the front sheet the Landlord should be described as:
[A, U & W]
"TRUSTEES FOR METHODIST CHURCH PURPOSES as Custodian Trustees and [NAME OF FIRST MANAGING TRUSTEE] and [NAME OF SECOND MANAGING TRUSTEE] as Managing Trustees of the [Church Council] OR [Circuit Meeting] OR [OTHER MANAGING TRUSTEE BODY] (*1) of [NAME OF MANAGING TRUSTEE BODY - USE REGISTERED NAME IF REGISTERED WITH THE CHARITY COMMISSION] (*2)"
2. Parties
The Landlord should be described as:
[A, U & W]
(1) TRUSTEES FOR METHODIST CHURCH PURPOSES of Central Buildings Oldham Street Manchester M1 1JQ being a charitable body corporate established by the Methodist Church Act 1939 registered with charity number 1136358 (the Board); and
[A, U & W]
(2) [NAME OF FIRST MANAGING TRUSTEE] and [NAME OF SECOND MANAGING TRUSTEE] and others being the members (or such of the members as have attained full age) of the [Church Council] OR [Circuit Meeting] OR [OTHER MANAGING TRUSTEES BODY] (*1) of [NAME OF CHURCH COUNCIL OR CIRCUIT MEETING OR OTHER MANAGING TRUSTEE BODY] OR [NAME OF REGISTERED CHARITY] (registered charity number [NUMBER])] (*2) whose collective address for service is [ADDRESS] (*3) (the Managing Trustees) and who collectively with the Board are referred to as the Landlord; and
3. Background
The following recitals are required. Additional recitals can be included if deemed necessary provided that these do not conflict with the Template Clauses at (A) to (D):
| (A) | [A, U & W] This licence is supplemental and collateral to the Lease [[U only] and the Underlease]. |
| (B) | [A, U & W] The Board is entitled to the immediate reversion to the Lease. |
| (C) | [A, U & W] The residue of the term granted by the Lease is vested in the Tenant. |
| (D) | [A only] The Tenant intends to assign the Lease to the Assignee and under the terms of the Lease, requires the consent of the Landlord.]
OR
[U only] The Tenant intends to underlet [part of] the Property demised by the Lease to the Undertenant and under the terms of the Lease, requires the consent of the Landlord.]
OR
[W only] The Tenant intends to carry out the Works and under the terms of the Lease, requires the consent of the Landlord.] |
4. Definitions and Interpretation
TMCP Legal assumes that the usual standard terms will be expressly defined in the licence. The following terms are required as they are used in these Template Clauses. If the precedent document being used has alternative defined terms then please substitute such defined terms in the Template Clauses as appropriate without changing the meaning.
4.1 Definitions
The following definitions and rules of interpretation apply in this licence:
[A only] Authorised Guarantee Agreement: the authorised guarantee agreement in the form annexed to this licence in Schedule [NUMBER].
[A, U & W] Lease: the lease dated [DATE] and made between (1) Trustees for Methodist Church Purposes (2) [NAME OF FIRST MANAGING TRUSTEE] and [NAME OF SECOND MANAGING TRUSTEE] as Managing Trustees of the [Church Council] OR [Circuit Meeting] OR [OTHER MANAGING TRUSTEE BODY] (*1) of [NAME OF MANAGING TRUSTEE BODY - USE REGISTERED NAME IF REGISTERED WITH THE CHARITY COMMISSION] (*2) and [DETAILS OF TENANT] and including all documents supplemental or collateral to that lease.
[A, U & W] Model Trusts: the model trusts for the time being contained in Part III of Schedule 2 to the 1976 Act.
[A, U & W] Property: [INSERT ADDRESS AND/OR DESCRIPTION] as demised by the Lease.
[A, U & W] Term: the term of years created by the Lease.
[U only] Underlease: an underlease of the [whole] OR [part] of the Property to be entered into between the Tenant and the Undertenant.
[W only] Works: [DESCRIPTION OF THE WORKS] as shown on the plans and specification attached to this licence.
[A, U & W] 1976 Act: the Methodist Church Act 1976.
[A, U & W] 2011 Act: the Charities Act 2011.
TMCP Legal assumes that the usual interpretation clauses will be included in the licence. Template Clauses 4.2 to 4.8 inclusive MUST be included in the body of the licence.
| 4.2 | [A, U & W] References to the Managing Trustees include their successors from time to time ascertained in accordance with the provisions of Part II of Schedule 2 to the 1976 Act. |
| 4.3 | EITHER
A. [A & W] References to the Tenant include where the context so admits its successors in title.
|
| 4.4 | [A, U & W] References to the Board shall include the persons for the time being entitled to the reversion immediately expectant upon the determination of the Term. |
| 4.5 | [A, U & W] References to the Landlord are to the Board and the Managing Trustees together and to their respective successors in title and assigns and the persons from time to time entitled to the reversion immediately expectant on the determination of the Term. |
| 4.6 | [A, U & W] In the event of the reversion of the Lease being transferred to a third party then all references in the body of this licence to the Managing Trustees and/or the Board shall be to the Landlord. |
| 4.7 | [A, U & W] Whilst the Landlord is the Board and the Managing Trustees together all covenants indemnities and obligations on the part of the Landlord are given by the Managing Trustees and not by the Board and nothing in this licence shall impose any personal or other liability on the Board as Custodian Trustees. |
| 4.8 | [A, U & W] In this licence all covenants, indemnities and all other obligations on the part of the Tenant [and the [A only] [Assignee] OR [U only] [Undertenant]] shall be deemed to be made with the Managing Trustees and Board separately. |
5. Charity law and Methodist law statements
Template Clauses 5.1 to 5.4 inclusive MUST be included in the body of the licence:
| 5.1 | [A, U & W] The Board holds the Property as custodian trustees upon the Model Trusts and the Managing Trustees are the managing trustees of the Property ascertained in accordance with the provisions of Part II of Schedule 2 to the 1976 Act. |
| 5.2 | [A, U & W] The Property is held by or in trust for a charity by the Board and the charity is not a exempt charity and this disposition is not one falling within paragraph (a), (aa), (b), (c) or (d) of Section 117(3) of the Charities Act 2011, but there is power under the trusts of the charity to effect the disposition and sections 117 to 121 of that Act have been complied with (*4). |
| 5.3 | [A, U & W] The Board has signified its written concurrence to the grant of this licence by affixing its common seal to this licence with the sanction of two of its Board members. |
| 5.4 | [A, U & W] This licence has been approved and ordered to be executed by a resolution duly passed at a duly constituted meeting of the Managing Trustees and it is intended to be executed by two of the Managing Trustees upon whom the Managing Trustees acting under Section 333 of the 2011 Act have duly conferred a general authority to execute in the names and on behalf of the Managing Trustees all assurances and other deeds and instruments. |
6. Consent to [[A only] assign OR [U only] underlet OR [W only] carry out works]
| 6.1 | EITHER
OR
|
Additional provisions
- [A, U & W] TMCP would expect the consent given under Template Clause 6.1 to be valid for a limited period of time subject to the usual provisions for extending the period of validity. Consideration would need to be given to which clauses would remain in force if the consent ceased to be valid.
- [A, U & W] TMCP would expect the licence to include the usual provisions confirming that the grant of Landlord’s consent does not obviate the need for any other consent that may be required.
- [A only] If the consent is subject to the Tenant entering into an Authorised Guarantee Agreement or otherwise TMCP would expect this to be specified in the licence.
- [U only] TMCP would expect a clause confirming that the Underlease will be in the form of the draft attached to the licence or granted on the terms set out in a Schedule to the licence and in a form that contains the same tenant covenants as those contained in the Lease except the covenants to pay the rents reserved by the Lease.
7. Obligations relating to the [[A only] assignment OR [U only] underletting OR [W only] Works]
[A, U & W] Please ensure that the licence includes all appropriate obligations on the Tenant, Assignee and Undertenant as appropriate. Please ensure that the drafting protects the best interest of the charity. Standard obligations that TMCP would expect to see include the following:
Occupation
- [A & U only] An obligation on the Assignee or Undertenant not to occupy the Property before completion of the assignment or Underlease.
Notice of completion
- [A only] An obligation on the Assignee to notify the Managing Trustees of the name and address of the person to whom demands for rent should be sent.
- [A & U only] An obligation to notify the Managing Trustees of completion, send the Managing Trustees’ solicitors a certified copy of the assignment/ Underlease and pay any landlord registration fee.
Registration of dealings
- [A only] An obligation to apply for registration at HM Land Registry within a set time frame, deal with any requisitions in connection with the application and send the Landlord official copies of title.
Prior obligations
- [A, U and W] TMCP would expect the Managing Trustees’ solicitors to set out any obligations to be fulfilled before the Tenant can assign, underlet or start carrying out the works including specific obligations negotiated with the Tenant for any particular deal and general obligations attached to certain licences e.g. to serve Landlord and Tenant Act 1954 notices and declarations on the landlord in the case of licences to underlet and obtaining all other necessary consents or approvals to works.
8. Costs
[A, U & W] An appropriate provision relating to payment of the Managing Trustees’ costs should be included in the licence based on this Template Clause 8:
On completion of this licence the Tenant shall pay the reasonable costs and disbursements of the Managing Trustees’ solicitors [and surveyor] in connection with this licence.
9. Right of entry
[A, U & W] An appropriate provision should be included relating to exercising the right of re-entry in the Lease if any obligations or conditions of the licence are breached.
10. Indemnity
[A, U & W] An appropriate indemnity clause is required based on this Template Clause 10:
The Tenant [and the [A only] Assignee OR [U only] Undertenant] shall indemnify the Board and separately the Managing Trustees against all liabilities, costs, expenses, damages and losses suffered or incurred by the Landlord arising out of or in connection with any breach of the terms of this licence.
11. Boiler plate provisions
[A, U & W] TMCP would expect the licence to include the usual boiler plate provisions including but not limited to notices, liability, third party rights and governing law and jurisdiction.
12. Execution Provisions
[A, U & W] IN WITNESS whereof the Board have caused their Common Seal to be affixed to this licence and [NAME OF FIRST MANAGING TRUSTEE] and [NAME OF SECOND MANAGING TRUSTEE] (being the persons authorised by this licence in the names and on behalf of the Managing Trustees) and the Tenant [and the [A only] Assignee OR [U only] Undertenant] have executed this licence as a deed and delivered it on the date at the head of this licence.
The Board needs to seal all ancillary lease documents:
| The COMMON SEAL of the TRUSTEES FOR METHODIST CHURCH PURPOSES was hereunto affixed with the sanction of the two members whose signatures are hereto subscribed
................................................................................. Signature of Board Member
................................................................................. Signature of Board Member
|
Ancillary lease documents also need to be signed by two authorised Managing Trustees:
| SIGNED as a Deed by [NAME OF FIRST MANAGING TRUSTEE] in the presence of:
Witness signature
..........................................................................
Witness name
...........................................................................
Witness address
..........................................................................
..........................................................................
..........................................................................
Witness occupation
..........................................................................
| .......................................................................... (signature of authorised Managing Trustee)
|
|
|
| SIGNED as a Deed by [NAME OF SECOND MANAGING TRUSTEE] in the presence of:
Witness signature
..........................................................................
Witness name
..........................................................................
Witness address
..........................................................................
..........................................................................
..........................................................................
Witness occupation
.......................................................................... |
.......................................................................... (signature of authorised Managing Trustee)
|
Footnotes:
| (*1) | Insert such other appropriate managing trustee body i.e. “The [NAME OF DISTRICT] District Trustees” or “The Connexional Manse Trustees”. |
| (*2) | If the managing trustee body is a registered charity and insert registered name and number. Please check with your clients and ensure the details on the Charity Commission website reflect the details that your clients have given you. |
| (*3) | Please insert the most appropriate contact address i.e. that of the Superintendent Minister or a Church or Circuit steward. |
| (*4) | This is the statement required under s.122(2) of the 2011 Act. |
If you have any queries in relation to the use of these Template Clauses please contact TMCP Legal.