As Christians we are called to serve God in all we do. Part of this is stewarding our resources well. What do you need to think about when your church is looking to buy or sell property? Here’s some advice from our friends at Edward Connor Solicitors.
All churches are charities and as such there are some complexities which come along with selling or purchasing a property. The Charity Commission has produced a guidance note on this which goes through the regulations which affect land or property held by a charity.
The Charities Act 2011 sets out additional steps which apply when disposing of charity land or entering into a mortgage. This law is designed to protect the charity’s assets and make sure trustees are acting properly.
Many property lawyers and agents are unfamiliar with the requirements of the Charities Act. So, for example, the requirement to obtain proper written valuation advice for a sale may be missed, which could make the transaction invalid, and make the trustees liable for non-compliance, or (as often happens) the requirements may only be realised on or shortly before completion leading to last minute delays and jeopardising the transaction.
There may also be requirements set out in the provisions of the property trust that are unique to churches and Christian organisations. For example, does the church have the power to sell the property? Are there any restrictions on what you can do with the property? Do your members need to approve the sale?
We are experts on church property, trusts and charity law, and we love to advise churches and Christian organisations. We can work with you to navigate your way through these steps.
We also deal with first registrations of land. Registration of land provides the owners with greater security and clarity and it provides protection against adverse possession of land. Registration also makes the conveyancing process more straightforward should you wish to sell in the future. If the land owned by your church or organisation is unregistered, it can make it more difficult to resolve problems caused by a change to the individuals acting as property holding trustees.
Changes to Trustees
1. Changes to the individuals acting as property trustees
Another thing to consider is what to do if your trustees change.
If your land is held on a trust and individual trustees are the registered owners at the Land Registry it is important to ensure the register of the property is kept up to date. The retirement and appointment of trustees must be formally documented. There are various ways to deal with this (such as by way of a Deed of Appointment and Retirement or a Transfer Deed) but it is vital these changes are recorded and registered at the Land Registry.
If these steps are not taken, it can cause issues or lengthy delays in your dealings with any charity property you have. For example, if trustees want to sell land registered in the names of former trustees, they must trace those trustees and ask them to sign the transfer documentation or obtain evidence of their death. The problems can be even more difficult to resolve if the property is unregistered (see above). We can work with you to ensure that you avoid any of these pitfalls.
2. Corporate trustees and CIOs
Your organisation may have a different legal structure, such as a charitable company, or perhaps your church has a trustee corporation acting as holding trustee. We are experienced in dealing with a variety of charity structures, including that of the CIO.
The CIO structure is a much more straightforward way to manage charity property as it is the CIO which owns the property. There is no need to go through a conveyancing process each time a trustee changes and you do not have to deal with another organisation acting as holding trustee.
A different approach
Property transactions can be stressful and difficult. Even if you are selling a vacant building there are a number of problems that can occur. The stress may be even worse if the transaction involves the pastor or another key member of staff moving home.
We are a Christian organisation, so we share your values and your perspective. We desire to get alongside our clients, helping them through the process and praying with and for them in any challenging situations.
Please give us a call if you want to talk through your requirements and find out how we might be able to help you.
This information has been provided by solicitors working for Edward Connor Solicitors. It is designed for the purpose of knowledge sharing only and does not constitute legal advice.