Please describe the relationship between the PCC and the hall trust. Have we got our hall-trust deed right?
A SERIES of questions have come to me about hall trusts and the church that owns the hall. Any charitable trust exists to fulfil its own objects, and the trustees must act for the trust without being controlled by other agents. So, if your hall has its own charitable trust and trustees, there are several things to observe.
The hall trust cannot be at the beck and call of the PCC: it can only, legally, focus on the objects defined in the constitution. It is subject to the scrutiny of the Charity Commission, but is an independent charity governed by charity law.
If the relationship between the hall, its trust, and the owners is not properly defined, you may find, after the first generation of good will, that issues arise. In particular, new trustees, after a decade or so, may have no sympathy with the church, and the choice of trustees cannot be controlled by the PCC.
At a minimum, set up legal structures to address those foreseeable issues before they happen. A good, legally structured relationship should be established, embodied in a lease. Many church councils seem to avoid doing this, hoping to leave things be, however ill-defined. In the lease, define the financial return the church will get from its asset: this is the rent that the trust will pay for having the right to use the hall. Allow for the rent to increase annually with inflation, and also to be reviewed by a chartered surveyor on a regular basis.
Define the responsibilities the trust has for repair and maintenance of the hall. There should be an opportunity for the PCC to inspect — annually, say — to ensure this is done. There is no reason for the church to continue to bear the cost and the management responsibility of repair and maintenance, unless it charges a higher rent to cover the costs.
Define how the church may in the future take the hall back from the trust; so define the length of the lease and break intervals. This has always, in my experience, been the biggest bone of contention with church-hall letting and leasing — that the church cannot get it back when it wants to.
The church’s own use of the hall, if it expects to use it for free, can be an issue to other user groups who pay for their sessions. In the lease, either agree that the church has a certain number of sessions annually at no charge, or make a charge to the church and include an allowance in the rent to reimburse the church later.
Ensure that the lease implies no ownership rights for the hall trust, and that the trust cannot dispose of the lease to someone else; it can only revert to the church. This is in case the hall trust becomes bankrupt, and those to whom it owes money seek to take over any asset of the hall in order to get paid.
Local people will remember that this is the church’s hall, and if the trustees get it wrong, the church will be blamed. Ensure you get everything well set up in the first place.