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PAGE ›› 28 THE PROPERTY HANDBOOK • An inventory of chattels • It may include a bond payment. If the lease is a residential tenancy, you must also ensure you understand your obligations, and abide by the Residential Tenancies Act. Copies are widely available together with standard tenancy agreements e.g. at PostShops, or online at www.dbh.govt.nz/tenancy. “Limitation of liability” clause This clause is inserted because the Trustees legally own a great deal of property on behalf of the Presbyterian Church – most of it property being held for other congregations. It is important that liability is restricted to the actual property involved. The clause should read something like this (consult your solicitor): “The liability of the Trustees under the terms of this Deed of Lease shall be limited to the property as set out in the schedule (attached) and shall not constitute a debt payable by the Lessee (or Lessor as appropriate) or their successors in office out of any other fund or property.” It is the congregation’s responsibility to ensure any conditions attached to leases are fulfilled. The church council must give the required notice to renew a lease that has a “right of renewal” clause. Insurance of leased property • Leasing part of your property may affect your insurance cover. • It may be prudent to also require the lessee to carry their own insurance e.g. public liability • Ask the Church’s insurance brokers (AON) for advice. Keeping records Make sure that you keep a careful record of all leases and other property transactions. This record keeping is important: • for successors in office • for charting exactly what has to be done in the future • the date/time for follow up.
PAGE ›› 29 THE PROPERTY HANDBOOK Use of property funds Why are there limits on the use of money raised by selling property? Your parish property is in the nature of a trust which you have received from the past members of your congregation. The General Assembly has decided that money raised by selling property is, in general, ‘ring-fenced’, because it was from a property trust. What can’t the capital be used for? The proceeds of sale of property cannot be used for the running costs of the current congregation: • minister’s stipend or staff salaries • administration costs • heat, light, power, insurances etc. • worship materials e.g. hymn books, projectors • vehicles • office equipment, appliances, sound systems etc • routine maintenance. What can the capital be used for? The proceeds of sale of property can be used for adding to your property through: • buying or building property • buying land • repaying mortgages • growth projects. SECTION 06 What else might it be used for? You might be allowed to use property money for major maintenance items, or for adding to the value of your existing property, providing certain conditions are met. Such approval is at the Trustees’ discretion. The main criteria are • How necessary is the expenditure? • Why is the parish unable do this from current income? • How will this expenditure benefit the future mission of the church?
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