Property Trusts and Trusteeship

Precious Seed

Introduction

Whilst there is no example in the New Testament of an assembly having sole access to a building for its meetings, there are definite advantages in that facility being available. However, with those advantages come several legal responsibilities. For many of us, our interest in the building in which we meet amounts to little more than its cleanliness and order. When it is decided to redecorate or re-carpet, there may be a passing interest in the decision, although many leave it to those with the relevant expertise to arrange. But how often do we ever ask, ‘Who owns the building?’ To whom are we responsible when there is a need for a major refurbishment? What is the relationship between the assembly that meets in the building, and the owners of the building?

Apart from those believers who meet together in a community centre or other rented premises, most assemblies meet in a hall owned and managed by trustees. This issue of trusts and trusteeship is becoming more problematic as congregations become smaller, and the age profile of existing companies increases. An assembly that has a local trust may be faced with the situation where they no longer have a minimum number of trustees (usually three), or where trustees are now in their late seventies or eighties, and the work is too complex for them to manage successfully. What should they do? The purpose of this article is to lay out some of the options and to consider their implications; it is also a call to younger people. These matters may appear to be a diversion from the fundamental matters of doctrine and practice but, as we shall see, they are linked.

It should be borne in mind that arrangements for property trusts and trusteeship varies between different countries within the United Kingdom and abroad. Whilst this article focuses upon England and Wales, readers may wish to consider its issues in the light of their own national legal framework. Trusts generally fall into one of two categories, local trusts or national trusts. Where the property is owned by a national trust, the trustees are Christians who may be located anywhere within the United Kingdom, but who are part of the national trust because of the expertise they bring to the work.

A local trust

A local trust will probably be made up of believers in the assembly who meet in the hall. It may contain one or more who have moved away from the locality but who are prepared to gather with fellow trustees to assist that assembly in the management of its premises. In the establishment of that trust, probably sometime in the past century, it was felt that trustees should either be in the fellowship, or be in the area and support the assembly in some aspect of its ministry. The advantage of such a trust was perceived to be the knowledge that local trustees would have – knowledge of the locality in which the assembly is seeking to witness.

Historically, local trustees were chosen for their spiritual qualities, many of them being elders within the local assembly occupying the building. In some cases, their secular activities may have given them an insight into the responsibilities they were to have as trustees of the building. However, at the time there were fewer regulations affecting their work, and this was not always deemed necessary.

One of the difficulties that exist for local trusts is their ability to remain cognizant of changing regulations and legislation. Briefing papers from such organizations as the Charities Commission are far more prolific today than they have ever been, and the regulations affecting those that have chosen to register their trusts as charities can entail a good deal of work in order to remain abreast of such matters. Is it possible for local trusts to keep in touch with their responsibilities successfully?

Legally, there is no need to register a local trust set up to manage the building with the Charities Commission. As it has no income, it does not exceed any income thresholds that would necessitate such a registration, provided any income from the assembly meeting in the building is kept separate.

A national trust

National trusts usually have a committee of trustees drawn from a wide area. Such trustees are often chosen for their professional expertise, and the help that such expertise can bring to the work of a trust overseeing many different buildings. Clearly, the regulations affecting an organization with a sizeable portfolio of assets is far greater than one that looks after one building of relatively insignificant value. A national trust of any size will probably have trustees with knowledge in the design and maintenance of buildings, legal matters relating to property and charitable operations, financial and insurance issues, as well as planning and building regulations. That knowledge will have been enhanced over a number of years of varied experience, something that would be difficult for any local trust to replicate.

The issues affecting the transfer of trust property

In transferring a property from a local to a national trust the following factors need to be borne in mind:

  • The ownership of the property will be transferred – it will no longer belong to the local trustees or the assembly that meets within it.
  • As ownership is transferred, the assembly using the building will become liable to pay rent as tenants. Some national trusts seek to introduce formal tenancy agreements between the trust and the assembly, and these agreements need to be scrutinised carefully as they are legal documents and will have implications for the assembly. As longstanding tenants there is no legal obligation to sign such an agreement. One national trust indicates that its standard minimum rent is £300 per year.1 This may be lower for other trusts but the cost needs to be borne in mind, as well as the ability of the property owner to raise the rent at any point, subject to appropriate notice periods.
  • Although the local assembly no longer owns the building, they will still be responsible for its repair and maintenance. The national trust may offer grants to meet significant expenses, but they could also charge interest on any loan they make. All expenditure by the local assembly in the maintenance of the building will be realized by the national trust should the testimony close. 
  • Should the testimony close, the proceeds of any sale of the building would go to the national trust who would decide where those proceeds should be disbursed. In some cases this might see former assembly-based investment in property sold, and the proceeds given to activities and organizations which have little commitment to scriptural principles.
  • Any local trust that is seeking to transfer its property to a national trust should make a detailed comparison between its own statement of doctrine and practice and that of the national trust – this comparison should not just look for what is included, but what is missing. Sadly, some trust statements are so broad as to give no protection for an assembly that is committed to the maintenance of New Testament doctrines and principles, particularly in relation to prophetic and church truth.
  • Are the trustees of the national trust in assembly fellowship and sympathetic to those companies following New Testament teaching? (even if a few are, this could quickly change). It must be remembered that the national trust could allow the building to be occupied by others whose practices are far removed from the principles of a New Testament assembly.

Alternatives to the transfer of property to a national trust are either to appoint the national trust as ‘sole trustee’, or ‘custodian trustee’. Whether some national trusts can offer either or both of the options would have to be investigated on an individual basis. The sole trusteeship option will not be considered here.

Holding or custodian trusteeship

Custodian trusteeship is a special kind of trusteeship arrangement that can be made between local trustees and a national trust.2 Under such an arrangement, although the legal title of the building/land is vested in the custodian, full control over the building/land and its use remains with the local trustees – these are usually referred to as ‘the managing trustees’.

The particular advantage of this option is that local trustees retain control of the building and its use. There is also some safeguarding in that local trustees avoid the need to transfer the legal title each time there is a change of managing trustees, thus saving legal costs and, where relevant, Land Registry fees. It can also ensure that any potential problems with the legal title if trustees forget to transfer the land title to new trustees are avoided.

What must be remembered, if such a route is chosen, is:

  • There has to be provision within the local trust’s documentation to ensure that custodian trusteeship can be explored.
  • There will be a significant legal cost to this type of trusteeship being set up – one national trust quotes costs from £700 upwards which would have to be borne by the local assembly;
  • Some national trusts will charge an annual fee to the local assembly to remain as custodian trustees;
  • That should the local assembly cease to function, the legal title to the building and land may well rest with the national trust (see point 3 above).3

Conclusion

The responsibility of trusteeship for any building is significant, some might say onerous, and it presents an on-going problem to companies of Christians. Whilst a decision about the land and building remains the task of a local trust, any proposed change to that arrangement should be researched very carefully. 

In that process, there are a few helps. Some national trusts have websites, and this can offer information on their services and costs. A certain amount of information can be gleaned from the Charity Commission website, as each national trust should be registered and their trustees listed. Whilst this site offers some simple information on accounts and statements of doctrine and practice, the real impact upon individual trusts can be difficult to determine. Overall, there is no substitute for talking to other believers who have their own experiences to share.

The concern that some believers have is the growth of national trusts and the significant assets that they now control. A cursory glance through their registered accounts can reveal property in excess of £10 million but, sadly, much of their income is donated to organizations and activities that no longer adhere to New Testament truth.

Endnotes

1 See, for example, http://www.churchgrowth.org.uk/admin/userfiles/briefing_papers/Support%20for%20property%20trustees%20(May2014).pdf – Appendix B

2 See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/352608/CC42-PDF.pdf for further information. 

3 Some national trusts do allow for the transfer of the legal title of the building/land back to the local trust at any point, but they may make a significant charge to the local assembly to enable this to happen.

 

This article is a compilation of material from different sources. However, questions on this thorny issue may be directed to the General Editor.