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Letting church halls and other parish properties

Ownership of Parish property

Under the provisions of the PCC (Powers) Measure 1956, Parochial Church Councils may not own property in their own right: Parish property, such as a Church Hall or a curate’s flat, is held by the London Diocesan Fund as Diocesan Authority (formerly known as the Custodian Trustee) with the PCC having the role of Managing Trustee; taking ‘day to day’ responsibility for the property. In the event of a sale, lease or license of any Parish property, other than a casual hiring, the consent of the Fund must be obtained. Also, any restrictions in any trust deed must be taken into account and the requirements of the 2011 Charities Act met.

Church Halls – Casual Hiring

There is no precise legal definition as to what type of lettings can be classed as casual hiring. However, as a guide these may be individuals or groups who rent a hall or other accommodation for a single occasion only or for one or two periods a week. Some examples of this type of user are:

  • A church-based Under 5s group
  • Fellowship Club
  • Women’s Institute
  • Mothers’ Union
  • Alcoholics Anonymous
  • Birthday parties or Wedding Receptions

A suggested form of casual hiring agreement that maybe adapted by Parishes for their own adaption and use is attached below.

Note

In certain circumstances, exclusive use of premises at particular times and on particular days may be interpreted as a tenancy for which a lease should be considered.

Church Halls – Formal Lettings

Any letting other than a casual hiring will require a formal agreement between the Fund, as Diocesan Authority (or Custodian Trustee), and the user. (The PCC may be joined in the agreement as Managing Trustee). Users under this category are individuals or groups who have exclusive use of the premises (or part) and/or use the premises for business purposes. Uniformed Organisations should, also, be included under this category as they will often require exclusive use of storage facilities. Some examples of this type of user are:

  • Nursery Schools
  • Small businesses
  • Worship Fellowship/Faith Groups
  • Theatre Groups
  • Scouts and Guides
  • Martial Arts Clubs

1993 Charities Act

To comply with this Act, any disposal (sale or letting) must be at full market value unless the charitable objects of the proposed user can be deemed to be parallel with the charitable objects of the parish. Market Value must normally be evidenced by a valuation report from an accredited surveyor – who must certify that the property has been placed on the open market and that the best offer has been obtained under current market conditions.

Landlord and Tenant Act

It is usually recommended that where appropriate lettings are contracted out of the ‘security of tenure’ provisions of this Act. The main purpose of these exclusions is to ensure that a tenant does not obtain a right of occupation when the agreed term of the letting has ended.

Use of premises by organisations working with children, young people and adults at risk

The welfare of children and young people is with those responsible for their care. Where external organisations are using church premises, hire arrangements must make it clear and agreed that the organisations are to abide by the PCC’s safeguarding policy. A copy of the policy to be used should be attached to the hire agreement. Hirers should be asked to sign a copy of the parish safeguarding policy, even when the organisation have their own, to acknowledge that this has been seen and will be adhered to.

Download a model hiring agreement from the resources block at the foot of this page. Please also see the section on ‘Hire of Church Premises’ in the diocesan Safeguarding Policy.

The Diocese’s Responsibilities as Diocesan Authority

Parish property is usually vested in the London Diocesan Fund as diocesan authority (custodian trustee). Sometimes the trustee may be the Bishop of London’s Fund, but in both instances the consent of the Fund is required for any letting or disposal – although not for a casual hiring. In this Diocese, the day to day responsibilities of the diocesan authority have been delegated by the Diocesan Bishops Council to the Diocesan Finance Committee. The Finance Committee, in considering any proposal affecting Parish property, would take into account the following considerations:

  • Is the proposal in the best interest of the Parish?
  • Have the restrictions or requirements in any trust deed been taken into account?
  • Does the proposed transaction comply with the requirements of the 1993 Charities Act?
  • Should the letting be contracted out of the Security of tenure provisions of the Landlord and Tenant Act 1954?

Deeds of Trust

Not all Parish properties have a deed of trust, some are simply held by the London Diocesan Fund ‘for the benefit of the Parish’. Other properties may have specific trusts attached to them restricting the use of the property and/or the use of any income or sale proceeds.

Sharing Agreements

There are a number of ways in which a Church building might be shared with another denomination. In all cases, the Archdeacon must be consulted in the first instance. Legal advice may be obtained from the Diocesan Registry.

Church Buildings

Any lettings in a Church or consecrated building will require a License under Faculty and will not normally require diocesan authority approval. Further information can be obtained from the Diocesan Registry. Should this involve any alterations or work to the fabric or the contents of the Church building, then the Diocesan Advisory Committee should be contacted in the first instance.

Solicitors

A formal lease of license will have to be drawn up by a solicitor and Parishes are advised to ensure that any firm of solicitors appointed is fully conversant with Ecclesiastical and Charity Law. Most parishes prefer to use the Diocesan Solicitors – who have expert knowledge in these fields. Parishes need to ensure that they are aware of the costs of legal fees and how these costs may be minimised by providing the right information in timely fashion. It may be possible to agree that legal costs should be the responsibility of the hirer.

Surveyors

The Fund recommends, when considering a formal letting/sale of a Parish property, the PCC always seeks professional advice in order to ensure that the best possible return is achieved – but it should always agree the fee basis with an agent or surveyor before work is undertaken.

Questions Often Asked by Parishes

A charity would like to use our hall for a youth project, but only have limited funding. The PCC would like to support this as we have no outreach to youngsters in the parish. Do we have to charge them a full rent? If the PCC regards this use as part of the Parish’s mission, it could be said the charitable objects of the youth project are in line with the charitable objects of the PCC and then, in some circumstances, exemption from the requirements of Charities Act to obtain a market rent is possible. We have been asked by a non-Anglican charity to allow them use of the Church Hall at a reduced rent. The PCC agree that they have a worthwhile project and would like to support them. Would the requirement for full market rent apply in this instance? Although the PCC may feel that it should be supporting worthwhile projects, exemption from the requirements of the Charities Act would only apply if it can be demonstrated that the Charity’s objectives are in line with the charitable objectives of the Church. Some Parishes overcome this by charging a full market rent and supporting the work of the Charity by means of a grant, as part of their charitable giving. We have a playgroup that has been using the hall for the last five years. There is no formal agreement with them but we have never had any problems. Most Parishes are able to maintain good relationships with their tenants and do not experience any difficulty. However, should a future problem occur, then without the benefit of a properly executed agreement, the result can be expensive legal costs when seeking vacant possession of the premises.

Diocesan Contact Details

Diocesan Authority enquiries are co-ordinated by Virginia Featherston, 020 3837 5054.

Resources

FileAction
Model Hall Hiring Agreement  Download  

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