- The Role of TMCP
- Charity law and Methodist law, policy and best practice requirements on sales
- Sale Guidance
|This page was last updated on 18th June 2023 following reforms made to the Charities Act 2011 which came into force on 14th June 2023. These relate to the report that charity trustees are required to obtain before disposing of charity land and who can provide such a report, now known as a “Designated Adviser Report or (DAR)”. TMCP will shortly be updating its guidance and resources including this document substantively.|
Managing Trustees decide to sell property for different reasons; perhaps a property needs to be sold to fund a new, more suitable, manse or worship space or is simply surplus to requirements. Whatever the reasons Managing Trustees as prudent charity trustees need to make the sale as beneficial to the charity as possible; by securing best terms for the charity and maximising the funds raised to further Mission on any part of the property that may have been retained or elsewhere in the Circuit, District or wider Connexion.
In accordance with the Connexional Property Strategy launched in summer 2019 and later revised in February 2021, before making the difficult decision to sell property or getting into a position where sale is the only option, Managing Trustees will be anxious to explore whether there are any alternatives available. Can the property still be used, perhaps in a different way to further Mission? Is any additional support or assistance available to the Managing Trustees if they wish to explore alternatives?
Following a review of the Connexional Property Strategy in early 2021, new guidance from Property Support is now available which sets out key priorities to enable effective use of property for Mission across the Connexion.
Managing Trustees are encouraged to refer to the "Strategic Guidance for Property in Mission" (particularly the questions referred to in paragraph 3.3 of the strategy) and to talk to their Circuit, District and the Connexional Team. The Property Development Pathways are a good place to start as they help Managing Trustees to actively explore alternative potential uses for their properties whilst remaining under Methodist ownership:
Property Development Pathways
Contact details for the Connexional Team can be found here.
First steps on the sales process - can you use the stremlining process for sales?
If Managing Trustees have decided that they want to explore the possibility of selling property and have considered the "Strategic Guidance for Property in Mission", then there are different steps to take depending upon whether one of the firms on the Methodist Panel of solicitors (Panel Firm) will be instructed to assist in the sale.
Methodist Panels of Solicitors
A Methodist panel of solicitors is in place and ready to act for Managing Trustees who are looking to instruct professionals who understand the responsibilities placed on them as Methodist charity trustees. It is strongly recommended that Managing Trustees instruct one of the Methodist panel firms to act for them to help transactions run as smoothly as possible. This will also enable your transactions to follow the streamlined sales process (see the Streamlining Page of the TMCP Website).
For information on the firms on the Methodist panel of solicitors, how the panel solicitor firms can help Managing Trustees and contact details, please see the Panel Solicitor pages on TMCP's website.
If Managing Trustees intend to instruct one of the Panel Firms (see box above), then they can take advantage of the streamlining process for sales introduced in September 2021. Please refer to the Streamlining Page of the TMCP Website for guidance on the six stages of the process, the key steps for Managing Trustees to take, when and how TMCP and your professional advisors will assist throughout the process and links to all the resources that have been prepared to help you. The Summary Flow Chart provides an at a glance of the streamlining sales process. The process aims to reduce the time that is spent on simple property transactions where one of the Panel Firms is involved by identifying and dealing with any issues at a much earlier stage and relying on the expertise of the Panel Firms at the time critical stages of a transaction which take place once a buyer has been found.
Managing Trustees in Scotland, the Isle of Man or the Channel Islands can follow a hybrid streamlined process so please refer to the resources on the Streamlining Page.
If Managing Trustees do not intend to instruct one of the Panel Firms, they will be unable to follow the streamlined sale process and in this case, one of the first steps is to obtain a Designated Adviser’s Report (DAR).
When to obtain surveyor’s and legal advice – where the streamlining process is NOT being followed
If Managing Trustees do not intend to instruct one of the Panel Firms, one of the first steps is to obtain a DAR and send it to TMCP for review and approval before the property is placed on the market and negotiations commence with potential buyers.
TMCP are preparing a template Designated Adviser’s Report (DAR) (Template DAR) and template letter of instruction to surveyors (Template Instruction Letter) to help surveyors produce a DAR that provides clarity of advice to Managing Trustees (before marketing) and deals with the requirements under charity law. These will be available to use whether Managing Trustees are instructing a panel solicitor or not and will replace the Template QSR and Instruction Letter which have proved successful in reducing the time taken to review and approve reports obtained on disposal of property.
Pending updates to the Template DAR following reforms to the Charities Act 2011 that came into force on 14th June 2023, please continue to use the existing template report.
Please use the Template Instruction Letter (temporarily removed pending update following CA2011 reforms) when you instruct your surveyor and provide your surveyor with this link to the Template DAR (https://www.tmcp.org.uk/property/sales/resources/standard-documents-and-forms/template-qsr). The webpage that the link takes you to contains additional important guidance and allows the surveyor to download the Template DAR in Word format.
In any sale, the DAR that the Managing Trustees are obliged to obtain under s.119 of the Charities Act 2011 (as amended) will provide vital guidance to the Managing Trustees on how to proceed in the best interests of the charity. The surveyor may for example suggest alternatives to a sale or recommend that certain actions such as obtaining planning permission or undertaking repairs are taken before putting the property on the market in order to obtain best price.
The more complicated a sale may be, the earlier it is recommended that Managing Trustees seek advice from their professional advisers. For example, if Managing Trustees want to sell part of a site and use the proceeds of sale (Circuit willing – please see Section F of the Sales Guidance for Managing Trustees for guidance on the application of proceeds) to transform a retained Sunday School into a new and vibrant worship space, their legal adviser and surveyor will be able to advise them on the options available. Speaking with professional advisers from the outset should limit any unexpected issues arising further down the process.
If the Managing Trustees are aware of the existence of any covenants on the land restricting its use, early advice on whether such covenants are enforceable and what steps need to be taken or avoided before the property is marketed should help to ensure that any impact on the sale is kept to a minimum.
If you are following the streamlined sales process then please refer to the Streamlining Page of the TMCP Website and contact TMCP Legal initially.
The legal owner of nearly all Methodist land and property is TMCP. TMCP holds legal title in its capacity as Custodian Trustee on trust for the local Managing Trustees by virtue of the Methodist Church Act 1976. This means that TMCP needs to be party to the sales documents. Under Standing Order 930(3) TMCP is also required to give approval to all matters where it is Custodian Trustee. TMCP is therefore required to ensure the transaction complies with charity and Methodist law as well as ensuring there is no breach of trust in accordance with Standing Order 930(3) and approves the documents on behalf of the Connexional Team under Standing Order 931(3).
As the role of TMCP Legal in a sale is to ensure that the charity law and Methodist law, policy and best practice requirements and procedures relating to the sale of Model Trust Property have been met, TMCP Legal have produced detailed guidance for Managing Trustees and their instructed professionals which is available on our website. TMCP Legal are also always on hand to answer any questions you may have (contact TMCP). TMCP Legal will also help Managing Trustees' solicitors to ensure that the transaction is otherwise lawful and in the best interests of the Managing Trustees.
There are various charity law and Methodist law, policy and best practice requirements that must be fulfilled before a sale of Methodist Model Trust Property can proceed. The requirements can seem daunting and Managing Trustees may therefore find it helpful to break these down into the steps set out in the Sale Guidance for Managing Trustees. (If you are following the streamlining process for sales then please read the general sales guidance together with the Streamlining Sales Focus Note to understand where the usual sales requirements fit into the Streamlining Process).
Although the exact requirements will depend upon the type of property being sold and method of sale, 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 Designated Adviser’s Report for review and approval by TMCP
- obtain a best price and adequate marketing certificate
- obtain confirmation as to whether the seller is connected to the charity within the meaning of s.118 of the Charities Act 2011.
- ask your legal advisers to ensure that the draft sale contract, transfer and/or lease include the Sales Template Clauses and that the draft documents are sent to TMCP Legal for approval
The Sale Guidance Notes aim to help Managing Trustees and their professional advisers to navigate their way through the charity law and Methodist law, policy and best practice requirements on sales:
On any sale of Model Trust Property:
- Sale Checklist
- Sale Guidance for Managing Trustees
- Sale Guidance for Solicitors
- Sale Template Clauses
- Sale FAQs
- DAR Focus Note (to go live shortly)
- Template DAR
- Template Instruction Letter (Temporarily unavailable pending updates following CA2011 reforms)
- DAR (Preparing) Focus Note (Temporarily unavailable pending updates following CA2011 reforms)
- First Legal Steps on a Property Project chart - This can be used as a tool to help Managing Trustees identify potential legal issues early in the process so that they can be taken into account and built into the project plans and/or resolved where possible.
- Short video on the sale of manses produced by Anthony Collins, one of the firms on the Methodist Church's Panel of Solicitors.
If you are following the streamlined sale process then please use the resources on the Streamlining page of the TMCP website:
If you are selling a burial ground:
- Burial Ground Guidance
- Burial Ground Sale Focus Note - This is available to Methodist Managing Trustees and their professional advisers in the password protected 'Trustee Documents' section of this website. (Please contact TMCP if you require the password)
- Burial Ground Template Clauses
If you are selling at auction:
If you want the sale to be considered as a replacement project please address any questions relating to logging a project to the Web Applications Team and any other questions to Property Support who are responsible for decisions relating to replacement projects. Although TMCP are not involved in the process the following guidance is available from TMCP on the steps to be taken by Managing Trustees:
If Managing Trustees or their solicitors would like any further guidance please do not hesitate to contact TMCP. Otherwise TMCP Legal looks forward to receiving confirmation that the charity law and Methodist law, policy and best practice requirements summarised in the Sale Checklist and detailed in the Sale Guidance for Managing Trustees and Sale Guidance for Solicitors have been fulfilled.