Sales Streamlining Focus Note

The streamlining process (Streamlining Process) introduced by TMCP aims to reduce the time that is spent on simple property transactions where one of the Methodist panel solicitor firms (Panel Firm) has been instructed by Managing Trustees.

The Sales Streamlined Flowchart sets out the six stages of the Streamlining Process for sales and the main steps to be taken by Managing Trustees, their professional advisers and TMCP.  All the resources relating to the Streamlining Process are available from the Streamlining Page of TMCP’s website.

This Focus Note looks at how and when the usual charity law and Methodist law and policy requirements that need to be fulfilled on a sale of Methodist property are fulfilled where the Streamlining Process is followed.  Managing Trustees can also continue to use the sales guidance and resources available on the Sales Page of TMCP’s website bearing in mind the information in this Focus Note.

Charity Law and Methodist Law and Policy Requirements

The usual charity law and Methodist law and policy requirements summarised in the Sales Checklist have to be fulfilled whether or not a sales transaction is on the Streamlining Process.  Full details of these are set out in the Sales Guidance for Managing Trustees. However, where the Streamlining Process is being followed, these will be fulfilled following a slightly different timetable to streamline the transaction as much as possible.

The usual charity law and Methodist law and policy requirements will be fulfilled as Managing Trustees work through Stage 1 (Pre-Marketing), Stage 3 (Offer Accepted) and the time critical Stage 4 (Conveyancing).

 

Once Managing Trustees have made the difficult decision to sell Methodist property after considering the Strategic Guidance for Property in Mission with the help and support of their Circuit and District, please contact TMCP so that we can provide guidance on the Streamlining Process and arrange an initial meeting with you (Check-In One) to discuss the sale. For guidance on starting the Streamlining Process please refer to the Streamlining Page.   As mentioned on the Streamlining Page, if you intend to use the Streamlining Process for Sales (or Leases), please contact TMCP before you:- DAR (Designated Adviser's Report) Put the property on the market Enter into any negotiations for sale Instruct your Panel Firm

B1 Obtaining final consent

Final consent, usually that of the District, will need to be in place before the parties become legally bound to complete the sale (Stage 5 - Exchange). Please refer to Section B1 of the Sale Guidance for Managing Trustees for guidance on logging a project and the need for consent. (For guidance on replacement projects please refer to Section B3 of the Sale Guidance for Managing Trustees.) The legal officer/case worker at TMCP dealing with your transaction will check whether consent is in place as the Streamlining Process progresses.

In terms of when to log a project if you are following the Streamlining Process, ultimately the timing of logging a project is for your District to decide.

Please bear in mind that independent to the Streamlining Process, Managing Trustees are encouraged to consider the Strategic Guidance for Property in Mission with the help and support of their Circuit and District before making a decision to sell and logging a project on the Property Consents Website. Please speak to your District at an early stage so that they can help you to explore any alternatives to sale so that the property can be used to further Mission while still in Methodist ownership.

Therefore, logging a project should not be the first time your District are made aware of the Managing Trustees’ decision to sell. For a straightforward Manse or chapel sale, you can log a project as soon as you have made the decision to sell. For less straightforward sales, e.g. sales involving burial grounds, and as long as your District has been involved in the decision-making process, we would suggest logging a project immediately after Check-In One. This is just in case the project needs to be logged in a different way due to issues uncovered at the Check-In e.g. that part of the property has been used as a formal or informal burial ground in the past.

Whenever the project is logged, TMCP does not receive automatic notification that a project is logged or consent entered. Please advise us of the project number and let us know when final consent is entered. We will make a specific check at Check-In Two (Stage 3 Offer Accepted) and when the Panel Firm provides the pack of documents before exchange of contracts (Stage 5 Exchange). Contracts cannot be exchanged until consent is in place.

B2 Designated Advisers's Report (DAR)

Under the Streamlining Process, it is recommended that Managing Trustees instruct their Designated Advisers to prepare the DAR after Check-In One.

At Check-In One, the legal officer/case worker at TMCP will highlight any particular issues with your property that need to be brought to your designated adviser’s attention. By flagging any issues before the DAR is commissioned, the aim is to reduce Managing Trustees incurring further costs and time delays involved in seeking clarification at a later date.

Managing Trustees are encouraged to refer to Section B2 of the Sale Guidance for Managing Trustees for detailed guidance on DARs. Your legal officer/case worker at TMCP will email you following Check-In One and provide links to the template DAR (Template DAR) and template letter of instruction to designated advisers(Template Instruction Letter). These documents have been prepared by TMCP to help designated advisers to produce a DAR that provides clarity of advice to Managing Trustees and deals with the requirements under charity law (prescribed by The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023.

In our Check-In One follow up email we will summarise any points to which we suggest you draw your designated adviser’s attention e.g. use part of the property by a neighbour or a restriction registered agains the title.

Please send TMCP a copy the DAR for approval. The DAR will need to be approved from TMCP’s perspective before the Managing Trustees take the steps recommended by the designated adviser e.g. market the property for sale or any pre-marketing steps such as obtaining outline planning permission or carrying out repairs.

C1 - Confirmation of best price and adequate marketing.

Once a buyer for the property has been found, and before  any Check-In Two, your designated adviser will need to provide written confirmation of best price and adequate marketing to comply with Model Trust 16(1)(b) and s.119(1)(b) and (c) of the Charities Act 2011. This confirmation should be in the form of an email or a signed letter, stating that the property has been:

(1) adequately marketed; and

(2) is being sold at the best price reasonably obtainable by the charity in the circumstances.

Please send a copy to TMCP for approval. For further guidance on best price and adequate marketing certificates please refer to Section C3 of the Sale Guidance for Managing Trustees

C2 - Check-in Two (optional)

Once best price and adequate marketing has been approved by TMCP, we will complete a Sales Statement form for you to review and pass on to your chosen Panel Firm, or we can do this direct if you tell us who is acting for you.

This form will confirm to your Panel Firm the current position in relation to the charity law and Methodist law requirements   and whether there are any other points for them to be aware of when they take your sale forward.  It aims to clearly set out the current position to avoid any delays from a charity law or Methodist perspective during the time critical conveyancing stage (Stage 4).

If you would like to have a Check-in Two meeting at this point to discuss the Sales Statement and/or the next steps, we are happy to arrange this with you. Please let us know. Otherwise, you are free to proceed without a Check-in Two. 

Please ensure your solicitors have a copy of the Sales Statement completed by TMCP once you reach the “conveyancing” stage of the process (Stage 4).

 

D1 - Connected Person Confirmation

TMCP require confirmation that the buyer is not a connected person (or that a Charity Commission Order is in place) before the sale can complete. Please see Section D4 of the Sales Guidance for Managing Trustees for details of this Charities Act 2011 requirement.

As part of the Streamlining Process, we will discuss this point with you at Check-In Two, once the buyer is known, to establish whether there are any connected issues. We will then help you to feed this information to your solicitor so that they can arrange for the Connected Person Certificate to be signed by the buyer as part of their work at Stage 4 (Conveyancing) before exchange of contracts (Stage 5).

If the buyer is a connected person then the transaction may not proceed until an order from the Charity Commission is obtained. We will provide further guidance at Check-In Two should this become necessary.

D2 Approval of documents

TMCP will need to approve the contract and transfer before exchange takes place (during Stage 4 Conveyancing).

TMCP have worked with the Panel Firms to streamline this part of the process. Pre-approved template documents have been developed that already include the required Sale Template Clauses as a matter of course. Your Panel Firm will therefore be able to submit draft documents to your buyer’s solicitors without having to seek TMCP’s approval beforehand as this is deemed to be in place.

Your Panel Firm will submit the contract and transfer to TMCP with an “Exception Report” (setting out any exceptions to use of the agreed templates with their advice to the Managing Trustees) so that approval can be confirmed. This should be confirmed as a matter of course so that your Panel Firm can proceed to exchange (Stage 5) as quickly as possible and TMCP can arrange for sealing of the transfer in readiness for Completion (Stage 6).

D3 Final Checks

When your Panel Firm submits the contract, transfer and Exception Report before exchange, the legal officer/case worker at TMCP will double check whether District consent is in place and that the DAR is no more than six months’ old. These two items can be followed up at this point.

TMCP will then be able to confirm to your Panel Firm that all of the charity law and Methodist law and policy requirements have been met. This means that you can move on to Stage 5 (Exchange) and your Panel Firm can ensure that everything is in place for completion (Stage 6).

Managing Trustees can refer to Sections E, F and G of the Sales Guidance for Managing Trustees for detailed guidance on the Methodist law and policy considerations at exchange, completion and post completion including destination of the proceeds of sale.