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PAGE ›› 22 THE PROPERTY HANDBOOK SECTION 04 Sale of property How will the sale of this property fit the mission of the congregation? Presbytery/UDC and the Trustees will want to know this, and it will clarify your thinking if you answer it at the beginning. Are there any special trusts e.g. bequests attached to the property which may hinder or prevent its sale? Remember that the property you have is an asset received ‘in trust’ from the past congregation. This means there may be limits on what you can do with it, and with the proceeds from the sale. If the property was gifted to the congregation, any conditions associated with the original gift must be fulfilled. Any difficulties should be resolved before the sale goes ahead. Sometimes, the wider local community in which a surplus church is sited (particularly in rural areas) may have strong views about what should happen to it. Appropriate consultation with the community can help avoid negative publicity. Remember that church property is a trust from all the past members of your congregation, going right back to its establishment. The assets have been given in the expectation they will continue to be used for the mission of the Presbyterian Church. Property can be sold if: • it is no longer needed - but there may be limitations on what can be done with the proceeds. These are set out in Section 6 of this handbook. • you wish to replace it with a property which will better fulfil the mission of the church – in which case you need to consider the objectives of both the sale and the purchase, and comply with the regulations in both this section and the previous section on purchasing property. The proposal must have the approval of the church council, the congregation, presbytery/UDC and the Trustees. It pays to consult with, and get approval from, these bodies as early as possible in the process. Remember: at each decision-making stage there needs to be a formal written record. (See the application for approval to sell form.) A check list to guide you through these steps is given at the end of this section.
PAGE ›› 23 THE PROPERTY HANDBOOK Before you sign a contract, you must: • Either gain conditional approval from the Trustees, based on the valuation before you start (giving a minimum price you can accept) • Or make your sale agreement subject to the approval of The Presbyterian Church Property Trustees. The Trustees prefer the conditional sale method as it allows for rapid action when a purchaser is found. You must have a valuation You will need to submit a recent market valuation of the property, undertaken by a registered valuer, as the Trustees have to be sure a reasonable price is being received. (Rating valuations or estimates by real estate firms are not sufficient.) It pays to obtain a valuation early in the process, so that you know the likely sale price band. Valuations must be no more than 90 days old at the time of signing a sale and purchase agreement, so you may need to ask your valuer to provide an update if there is a lengthy period between gaining approval to sell and finding a buyer. A word about real estate agents Parishes frequently use real estate agents to market the property. • Most agents want a sole agency. It is prudent to invite several proposals before making a decision. • If you do decide to use a sole agency, then your contract (Sole Agency Agreement) with them should be for a short duration e.g. 60 days. This time limit must be written into the contract. • If you sell a property while there is a sole agency agreement in operation, you will have to pay the agent’s fee even if they had nothing to do with the sale. • It is good practice to have your parish solicitor approve the proposed agency agreement before you sign it. When you find a purchaser You may sign an agreement to sell BUT it must be conditional on the approval of the Trustees, unless you already have that approval. The wording required is “conditional on the approval of The Presbyterian Church Property Trustees.” If you already have conditional approval from the Trustees, then your agreement must comply with that approval in all respects, otherwise you must sign a conditional contract and go back to the Trustees for a new approval. Does the agreed price include GST, or is it plus GST if applicable? Make sure you cross
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