Throwing light on your property Trust Deed

Not the most exciting title for an article! Yet many people reading Foundations Magazine are trustees of gospel halls and this may be just what you have been waiting for. You may be baffled by the language of the Trust Deed, under which the property is held, or you may be making incorrect assumptions about what you can or cannot do under the Trust. If you feel like you are groping around in the dark, throwing some light on these problem areas and highlighting the things to look out for, may be exactly what you need.

The objects or purposes of a charity are the whole reason for the Trust being set up in the first place. It is what makes it a charity, but surprisingly it is sometimes difficult to see what the objects are. In some cases they may be very broad, such as “to advance the Christian faith”. In most cases they contain the words “to use or permit the trust property to be used by…”, followed by references to either the original assembly/church that the building was erected for or more generally to any church that occupies the building. Often this reference specifies the doctrines and practices permitted by the Trust Deed.

These can be very brief and only refer to a number of biblical principles or they can be quite detailed, including setting out bible verses. Almost all “practices” refer to believer’s baptism and the practice of breaking bread on the first day of the week. In some cases they can contain very specific requirements ranging from the role of women in meetings to the use of drums! As a trustee of the property you have a responsibility to ensure that any occupying church is preaching and acting in line with the doctrines and practices. If not, you will need to consider what action needs to be taken, how serious the variation is and how flexible you can be.

Trustees’ Powers
Trust Deeds can be very specific or incredibly vague on what powers the trustees have. Can you take a mortgage? Can you let the property and charge a rent to the original assembly or a new church? Is there a power to sell the property and if so under what circumstances?

Some trustees think they can sell the property as and when they wish to, but often the Trust Deed will only allow a sale if certain circumstances take place (e.g. the assembly has closed). You also need to consider what any proceeds from a sale (or rent) can be used for. If they can only be used on the existing building or a new building in the same town/village, this may be “permanent endowment”.

In some cases Church Growth Trust has managed to negotiate with the Charity Commission that the proceeds can be given to certain work within a specified radius of the property and, in other cases, that proceeds may be given to a much broader range of activities that the previous assembly would have supported.

Trustees also need to check the Trust Deed to see whether there is an “ultimate beneficiary”. An ultimate beneficiary is a body, such as Echoes of Service or the Muller Foundation, that is entitled to the proceeds of any sale. This makes it difficult to gift the property to any other charity.

Often the Trust Deed does not give a specific power to gift the property, which may cause problems if the trustees wish to give the property to another church or to a national property-holding charity such as Church Growth Trust. However, where it is possible to sell the property at full value to another charity and then gift the proceeds to that same charity, the Charity Commission will often allow a shortcut under a case known as Re Collards Will Trust. This would allow the property to be gifted to the charity.

Are you finding it difficult to find new trustees? Are your trustees ageing and wanting to retire? When did you last meet? Do you know who is allowed to be a trustee? Does your Trust Deed require trustees to be members of the assembly? If so, this may create a problem where the numbers in your assembly are reducing.
The Trust Deed normally sets out the procedure for appointing new trustees and for their removal. If the right procedures are not followed people may believe they are a trustee, but in reality they are not. It is also worth noting that the appointment of a new trustee is a trigger event for the title to the property being registered with the Land Registry.

A Trust Deed may also require a minimum number of trustees and a minimum number to be at a meeting for there to be a quorum (and therefore to allow decisions to be made). Are you following any procedure for calling and holding meetings and making decisions? If not, you are likely to be in breach of the Trust.

Connection with Assembly
Sometimes the Trust Deed not only prescribes the management of the property, but also the operation of the assembly/church itself. In most cases however the Trust Deed refers to the assembly only in terms of them being allowed to use the property. There are often prohibitions on uses within the property and these can be as varied as not holding theatrical performances, bazaars or dancing.

National Property Trusts
In many Trust Deeds, particularly those set up for the Open Brethren, there is a power for the trustees to gift the property to specific national trust-holding bodies, such as the United Kingdom Evangelization Trust (UKET) or the Western Counties and South Wales Evangelization Trust (Church Growth Trust are the successor to UKET). In this case there are no issues with gifting or selling the property as mentioned above.

Changing the Trust Deed
You may wish to make changes to your Trust Deed (e.g. to reduce the minimum number of trustees). It is often possible to do this by passing a resolution under Section 280 of the Charities Act 2011. However the objects or any dissolution clause cannot be changed without the Charity Commission’s approval, even if you are not registered with them.

If you would like your Trust Deed to be reviewed or you have any questions that have been raised by this article, please feel free to contact Giles Arnold, General Manager for Church Growth Trust on 01536 647164 or or read our briefing paper on this subject.

Foundations Autumn 2017