Purchases

Introduction
 

Managing Trustees decide to buy property for many reasons including but not limited to the purchase of a new Manse, land on which to build a new church that meets the needs of today’s congregation, and land to enable re-development of an existing church site. There are also circumstances where property is transferred to the Methodist Church as a gift from a church member or where land is transferred from a neighbouring landowner to rectify a title problem. Managing Trustees, as charity trustees, will need to carefully consider whether the land or building they have identified is suitable for Mission purposes. There may be factors such as whether any repairs or alterations will be required and the same have been budgeted for, is the land or building in the right location, can the land or building be used for its intended purpose, if the property is to be used as a Manse does it meet the required standards under Methodist Standing Orders and can the Managing Trustees fund the purchase?

A purchase can be very exciting, but it is important not to get carried away and to always heed the advice of the Managing Trustees’ professional advisers as to whether the deal on the table is in the best interests of the charity and whether the Church is acquiring good title. It is important to ensure that any issues, such as there being no rights of access or structural problems, are identified and addressed before exchange of contracts and decisions taken as to whether it really is in the best interests of the charity to proceed.

The Role of TMCP

All new land and property acquired by the Church must be held on the Model Trusts set out under Part III of Schedule 2 to the Methodist Church Act 1976 (Model Trusts). This is a requirement under Standing Order 901. This means that the legal title will be held by TMCP, in its capacity as Custodian Trustee, on trust for the local Managing Trustees.

The role of TMCP Legal in relation to a purchase is to ensure that the charity law and Methodist law, policy and best practice requirements and procedures relating to the purchase of property which will be held on the Model Trusts have been met. We will also help Managing Trustees’ solicitors to ensure that the transaction TMCP is being asked to enter into as Custodian Trustee is otherwise lawful and in the best interests of the charity.

Charity law and Methodist law, policy and best practice requirements on purchases

Although the legal requirements on a purchase can be seen as less onerous than on a sale, there are requirements under the Charities Act 2011 (2011 Act) as well as Methodist law, policy and best practice that will need to be fulfilled before a purchase can proceed.

In summary the Managing Trustees will need to:

• log a project on the Consents Website so that the three levels of consent can be entered
• obtain a purchase survey (including a valuation) confirming that this is a good deal for the charity for review and approval by TMCP
• obtain confirmation as to whether the seller is connected to the charity within the meaning of s.118 of the 2011 Act
• watch out for any potential conflicts of interest and take steps to address such conflicts
• ask their legal adviser to ensure that the draft purchase contract, transfer and/or lease include the Purchase Template Clauses and that the draft documents are sent to TMCP Legal for approval
• ask their legal advisers to investigate title to the property and confirm to TMCP that the Methodist Church is acquiring good title and
• the property is suitable for its intended use by the Methodist Church;
• in the case of Manses only: confirm the property complies with the requirements under SO 803 and the Manse guidelines in Book VII, Part 2 CPD (see CPD – Volume 2); and
• ensure that funding is in place

Purchase Guidance

The Purchase Guidance Notes produced by TMCP aim to help Managing Trustees navigate their way through the charity law and Methodist law, policy and best practice requirements on purchases.

On any purchase or transfer of land or a building to the Methodist Church please utilise the following resources :

Resources

• Purchase Checklist - An at a glance summary of the charity law and Methodist law and policy requirements. 
• Purchase Guidance for Managing Trustees
• Purchase Guidance for Solicitors
• Purchase Template Clauses
• Purchase FAQs
• Short video on the purchase of manses, produced by Anthony Collins, one of the firms on the Methodist Church's Panel of Solicitors.

If you are instructing a Panel Firm/following the Purchase Streamlining Process:

• Purchase of a New Build Focus Note
• Lease to TMCP Template Clauses

If you want the purchase to be considered as a replacement project.

• Replacement Project Focus Note
• Methodist Property Consents

If you are using funding held on the Model Trusts:

• Money out

If the Managing Trustees or their solicitors would like any further guidance please do not hesitate to contact TMCP.

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