SYNOD - 17 MARCH 2012 - Property Officers Report

Moderator, Members of Synod

The circulated Report is for information only, but I would like to take the opportunity of updating this afternoon.

Many of you will recall that Moorgreen URC was closed, and the church building sold some years ago, since when Synod has been a long a somewhat tortuous journey with the Charity Commission, but at last, I am able to report progress and later this month I expect the Charity Commission to issue the Scheme, which has been so long awaited to enable the trustees to expend capital, as the income from the Trust Fund would have amounted to only a few pounds each year.  The Synod Mission Fund will deal with applications for Grants from the churches in the former Erewash Valley Group, and decisions should be made later this year.

Selston United Reformed Church has now passed a Resolution to close, and I will be visiting Selston with a local Chartered Surveyor and the Minister next Wednesday to discuss the most appropriate way of selling the building and the site, the proceeds of which will be credited to the Synod Manse Fund.

In Leicestershire, there is now a proposed Buyer for the former Lutterworth Manse in the sum of £205,000, subject to contract, this price revealing yet again the troublesome position of the property market at the present time.

In Lincolnshire, we have the continuing problems affecting the building in Orton Goldhay and I shall be making a visit there later this afternoon at the conclusion of this meeting of Synod. You will have noted from my circulated Report that part of the damage has been caused by large mature trees in close proximity to the building.  If your church has any such trees, which could possibly endanger your buildings, please obtain professional advice and follow that advice, before you encounter the problems that are affecting Orton Goldhay.  There are other matters affecting the building at Orton Goldhay, and these are being monitored.  Those of you who know the building will recall the modern design and the unusual roof support structure. Nevertheless the Structural Engineers believe that it should in time be possible to reinstate the building to its previous good order for a reasonably modest financial outlay.

There is now another proposed Buyer for the former Brackley Manse and it is to be hoped that this time the transaction will reach completion, although I am sure that you have read in the press about the very large number of sales that fall through owing to a variety of reasons before contracts are exchanged.

In Synod, we have three churches, Whittlesey, Grantham and Tideswell, where  LEPs have been formed in recent years with the local Methodist Church, and in each case, the LEP has decided for varying reasons to use the Methodist building and to arrange a sale of the URC building.  This has inevitably caused the Finance and Property Group to reflect on the position.  I did mention this matter briefly at the last meeting of Synod.

Historically, it would appear that there is an agreement dated in either 1990 or 1992 and apparently ratified by the relevant bodies of both denominations which attempted to simplify arrangements for investing capital in jointly used buildings.  In essence, the agreement stated that when either denomination invests in an existing building of the other, the investing denomination would not seek a share of the ownership of the jointly used building.  This was deemed to simplify ownership matters locally and across the whole country, the investment of one denomination’s money in the buildings of the other  being regarded as probably and roughly balancing out.  The agreement is set out in the “How to make it Work” document for LEPs on, I understand, both Church websites.

Questions have quite rightly been asked whether this agreement is always being adhered to, especially by local churches who could offer capital into a shared building, but are reluctant to do so without some claim on the building, possibly by way of a mortgage or legal charge.

The agreement does not necessarily apply if a new shared building is being constructed with money from both denominations.  However, if a new congregation with capital from the sale of its former building is joining an existing congregation in the latter’s building, there is no option for the host congregation to sell a share in their building to the incoming congregation’s trustees.  This latter prohibition, at least as understood by the Methodists, arises from what is at best an ambiguity in the current Sharing of Church Buildings Act, which may mean such equity sharing would not be legal.

Since the early 1990s when the Agreement was signed, several pertinent matters have emerged, or emerged more strongly.

Firstly in at least some respects, both denominations, I am told, have became less “connexional” and more “diocesan” or “congregational” and therefore the merits of an agreement that may be deemed fair across the country, but looks skewed locally (for example in a Circuit or Synod), is harder to advocate

Secondly, Trustees, including local URC Elders, have become more aware of, and more anxious about, their charitable responsibilities, and I am sure that in some quarters there is concern that there could be breaches of the Charities Act and the United Reformed Church Acts

Thirdly, both denominations include voices who say that a key task for the next ten years is to find creative ways of converting capital in underused bricks and mortar into revenue streams for funding contemporary mission.

Fourthly, Methodist Council and Mission Council have agreed to establish a joint buildings Group to move forward the practicalities in exactly these areas and related ones.

The problem from our Synod’s position and all the other Synods and the Methodist districts is difficult and somewhat urgent, particularly for us in East Midlands Synod, because of the three churches that I have mentioned..

There are many complex matters to be considered such as establishing a valuation of church buildings, and the difficulties of this, to which I alluded to earlier.  Should a Sharing Agreement provide for a legal charge to be drawn up  for the repayment of a proportion of the sale proceeds when the building is sold?  This would delay the repayment until the sale, which would avoid any risk of one denomination putting the other, if I can be colloquial, out on the streets.  Perhaps it would be necessary to have a time schedule of, say, five or ten years.  Another possibility would be to have a Declaration of Trust.  I am sure you will all appreciate that this is a somewhat emotional issue to some people, a number of whom have contacted me, -- and Synod and Mission Council must tread warily and with caution.

At a joint meeting at Methodist Church House last month, it was agreed that the Convenor would contact all Synods asking them to identify sales of properties, where a Sharing Agreement was involved and possibly a Declaration of Trust.  The Questionnaire related to such transactions within the last ten years and asked for details of the percentage split agreed between Methodists/URC and how it was agreed.  The aim of this exercise is to identify how well or how badly the relatively loose arrangement has worked over an identifiable period.  The replies to the Questionnaire will be discussed at the Joint Meeting next month, although it is doubtful if a recommendation will come from that meeting, but it does indicate that the two denominations are now anxious to resolve what has become to some churches a source of embarrassment.

The 2012 Valuation of Manses exercise is now underway at the request of the Trustees.  I know that some churches have expressed concern that their manse is being valued, but I can assure everyone that there is nothing sinister about this.   All manses are held in the name of the Synod Trust Company and if ever they are sold, the sale proceeds will be placed in the Synod Manse Fund, unless they are used to purchase an updated manse for the same Pastorate.  The Trustees were anxious to have a valuation of all Synod’s manses, as very few of them previously appeared in the Trust Accounts - in fact only those purchased in the last 10 years or thereabouts.

The Trustees have however decided not to have the churches valued, as the market value of the churches seems always to be considerably less than the insurance value, as we find out on sales,  and this would therefore lead to confusion.

A brief word about Quinquennial Inspections.  These should now be called Septquennials, unless we are referring to listed buildings, which must still be inspected every five years.  It is taking time to adjust to seven yearly inspections, but it is happening gradually, although some churches may have noted that they are having an inspection this year, although their last inspection was probably six years ago.  Manses are no longer inspected, as the church, as Managing Trustee is responsible for their maintenance and upkeep.  However, when there is a change of pastorate, Synod will look at the empty manse and decide with the local church whether it should be sold or improved in accordance with the Synod Manse Policy.

Finally, I have produced at the end of my circulated Report a report that the Finance and Property Group receives each year from the Listed Buildings Advisory Group.  What you have before you today indicates the tremendous amount of work undertaken by the Convenor, secretary and members of LBAG and Synod appreciates so much their knowledge and expertise in dealing with our listed buildings.

This concludes my Report, this afternoon, Moderator, and with your permission, I will be happy to deal with any questions or queries from members of Synod.