Non-Residential Lease (Landlord) Template Clauses

These Template Clauses are for use on the grant of a non-residential lease. When preparing the lease, please consider the contents of the Non-Residential Lease (Landlord) Guidance for Solicitors, the Non-Residential Lease (Landlord) Heads of Terms and the professional advice obtained by your clients, the Managing Trustees.

You should incorporate the following provisions, without amendment, unless indicated otherwise. The only amendments that should be made are amendments to the terminology used to ensure that it correlates with the terminology used in the rest of the lease.

1. Front page

On the front sheet the Landlord should be described as:

"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. Prescribed clauses in registrable leases

Prescribed clauses must be used in accordance with the Land Registry’s requirements:

3. Parties

BETWEEN

(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

(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] (*5) of [NAME OF CHURCH COUNCIL OR CIRCUIT MEETING OR OTHER MANAGING TRUSTEE BODY] OR [NAME OF REGISTERED CHARITY] (registered charity number [NUMBER])] (*6) whose collective address for service is [ADDRESS] (the Managing Trustees) and who collectively with the Board are referred to as the Landlord; and

(3) [INSERT DETAILS] (the Tenant)

4. Definitions and Interpretation

TMCP Legal assumes that the following terms will be expressly defined in the lease.  If they are not expressly defined, or if different terms are used, please amend the standard drafting as appropriate.

4.1 Definitions:

The following definitions and rules of interpretation apply in this lease:

Annual Rent: rent at an initial rate of £[AMOUNT] [refer to fact that rent is then as revised pursuant to any rent review if relevant to lease in question] .

[Board's Neighbouring Property: each and every part of the adjoining and neighbouring property in which the Board has an interest known as [ADDRESS] [registered at HM Land Registry with title number[s] [NUMBER[S]] [shown edged [BLUE] on the attached plan marked [ ].] (*7)

Model Trusts: the model trusts for the time being contained in Part III of Schedule 2 to the 1976 Act.

Permitted Use: [INSERT DETAILS].

Plan: the plan attached to this lease.

Property: [INSERT DETAILS - please ensure that if the premises demised by the lease form part of other premises that the drafting clearly defines what is and what is not included in the demise to avoid uncertainty over responsibility for repair etc.]

Rents: the rents reserved by this lease.

Reservations: all of the rights excepted, reserved and granted to the Landlord by this lease.

Term: the term of years created by this lease beginning on and including [DATE] and ending [DATE].

1954 Act: Landlord and Tenant Act 1954.

1976 Act: the Methodist Church Act 1976.

2011 Act: the Charities Act 2011.

Template Clauses 4.2 to 4.8 inclusive MUST be included in the lease.

4.2 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 References to the Tenant include where the context so admits its successors in title.

4.4 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 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 In the event of the reversion of this lease being transferred to a third party then all references in the body of this lease to the Managing Trustees and/or the Board shall be to the Landlord.

4.7 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 lease shall impose any personal or other liability on the Board as Custodian Trustees.

4.8 In this lease all covenants, indemnities and all other obligations on the part of the Tenant shall be deemed to be made with the Managing Trustees and Board separately.

5. Charity law and Methodist law statements

The following provisions MUST be included in the body of the lease:

5.1  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 The Property is held by or in trust for a charity by the Board, the charity is a non-exempt charity, and this lease is not one falling within paragraphs (a), (aa), (b), (c) or (d) of Section 117(3) of the 2011 Act, but there is power under the trusts of the charity to effect the disposition and section 117 to 121 of that Act have been complied with. (*8)

5.3 The consent of the Methodist Council has been given to the grant of this lease by a Memorandum of Consent dated [DATE OF MEMORANDUM OF CONSENT] signed by the Conference Officer for Legal and Constitutional Practice or by another person authorised by the Methodist Council.

5.4 EITHER: (A) if the lease is for a term of less than 22 years OR (B) if the term is of 22 years or more:

5.4A Pursuant to Section 9(8)(b)(ii) of the 1976 Act the Managing Trustees are empowered to execute this lease in the name and on behalf of the Board. OR

5.4B The Board have signified their written concurrence to the grant of this lease by their execution of this lease.

5.5 This lease 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.

If the tenant is a connected person:

5.6 The Managing Trustees certify that the Tenant is a connected person for the purposes of s.118([RELEVANT SUB-SECTION]) of the 2011 Act and that as charity trustees they have obtained an order from the Charity Commission authorising this disposition.

6. Demise

EITHER: (A) if the lease is for a term of 22 years or less OR (B) if the term exceeds 22 years:

6.1A In consideration of the Rents and of the covenants on the part of the Tenant contained in this lease, the Managing Trustees in the name and on behalf of the Board let and as managing trustees let the Property with limited title guarantee to the Tenant for the Term.

6.1B In consideration of the Rents and of the covenants on the part of the Tenant contained in this lease, the Board as Custodian Trustees and the Managing Trustees as managing trustees let the Property with limited title guarantee to the Tenant for the Term.

6.2 The Property will be let with limited title guarantee subject to the proviso that for the purpose of the covenant implied by section 3(3) of the Law of Property (Miscellaneous Provisions) Act 1994 neither the Board nor the Managing Trustees are to be considered as being aware of an action of another person merely because it is or was known to or notice of it was given to a predecessor in title or co-trustee.

7. Reservations

Please refer to the Non-Residential Lease (Landlord) Heads of Terms and ensure that the rights reserved to the Landlord will, amongst whatever other reservations you advise, allow the Managing Trustees to comply with their obligations under Methodist law in relation to the five yearly inspections known as quinquennials. Under Standing Order 952, all local and circuit property must be inspected at least once every five years by professionally qualified persons. The person who carries out the inspection will report back to the Managing Trustees and recommend any works that are deemed to be required. Such works should be carried out by the tenant as part of the tenant’s repairing obligations under the lease.

8. Tenant covenants

The Tenant covenants with the Landlord as follows:

Please ensure that the lease includes all appropriate Tenant covenants. Please refer to the Non-Residential Lease (Landlord) Heads of Terms and ensure that these are taken on board. Requirements under Methodist law are dealt with separately; insurance provisions, charging, use.

9. Landlord Covenants

The Managing Trustees covenant with the Tenant as follows:

TMCP Legal would expect the usual Landlord covenants to be included but please do ensure that any obligations are explained to your clients so that they understand what they are obliged to do under the lease.

10. Insurance

Please refer to paragraph 7 of the Non-Residential Lease (Landlord) Heads of Terms in respect of insurance.

If the Property is within the curtilage of a church site please note the specific requirements as regards reinstatement. Due to the many different ways that insurance provisions are drafted in leases it is difficult to provide template wording but the provision should be based on the following:

10.1 If, following damage to or destruction of the Property, the Managing Trustees determine in their absolute discretion that it is impossible or impractical or otherwise not in the best interests of the charity to reinstate the Property, the Landlord may terminate this lease by giving notice to the Tenant.. [Insert usual provisions regarding termination being without prejudice to rights/ remedies of the Landlord in respect of breach of tenant covenants and proceeds belonging to the Landlord.]

11. Charging

The Tenant shall not charge the whole or part only of this lease.

12. Use

12.1 The Tenant shall not use the Property for any betting or gambling in any form or for the sale, supply or consumption of alcoholic beverages, public dances or the sale of adult products or for any other purpose contrary to the Standing Orders of the Methodist Conference in force at the date of this lease. (*9)

If the Property is within the curtilage of a church site:

12.2  The Tenant shall not use the Property for Sunday trading.

13. Safeguarding

If the Property forms part of a building used by the Managing Trustees, the template safeguarding clause and additional definition is required:

[Safeguarding Policy: the safeguarding policy of the [NAME OF CHURCH] Methodist Church OR [NAME OF CIRCUIT] Methodist Circuit OR [NAME OF OTHER MANAGING TRUSTEE BODY].]

The Tenant confirms that they have received a copy of the Safeguarding Policy, have an understanding of it, and undertake to follow it or comparable equivalent guidelines and procedures (such as Scouting and Guiding national safeguarding policy) for the safeguarding of children, young people and vulnerable adults at the building of which the Property forms part.

14. Exclusion of sections 24 to 28 of the Landlord and Tenant Act 1954

The lease will need to include an appropriate provision to exclude sections 24 to 28 of the 1954 Act. The provisions may be based on your own precedent wording or the following but must effectively exclude security of tenure:

14.1 The parties confirm that:

(a) the Landlord served a notice on the Tenant, as required by section 38A(3)(a) of the 1954 Act, applying to the tenancy created by this lease, before this lease was entered into; [and]

(b) [the Tenant] [[NAME OF DECLARANT] who was duly authorised by the Tenant to do so] made a statutory declaration dated [DATE] in accordance with the requirements of section 38A(3)(b) of the 1954 Act declaration is annexed to this lease; [and

(c) there is no agreement for lease to which this lease gives effect.]

14.2 The parties agree that the provisions of sections 24 to 28 of the 1954 Act are excluded in relation to the tenancy created by this lease.

15. Execution Provisions

EITHER (A) if the lease is for a term of 22 years or less OR (B) if the term exceeds 22 years:

A:
IN WITNESS whereof [NAME OF FIRST MANAGING TRUSTEE] and [NAME OF SECOND MANAGING TRUSTEE] (being the persons authorised by this lease in the names and on behalf of the Board and of the Managing Trustees) and the Tenant have executed this lease as a deed and delivered it on the date at the head of this lease

B:
IN WITNESS whereof the Board have caused their Common Seal to be affixed to this lease and [NAME OF FIRST MANAGING TRUSTEE] and [NAME OF SECOND MANAGING TRUSTEE] (being the persons authorised by this lease in the names and on behalf of the Managing Trustees) and the Tenant have executed this lease as a deed and delivered it on the date at the head of this lease

If the Board need to seal the lease ONLY:

Note that two authorised Managing Trustees and charity trustees must always sign the lease.