Renting to Charity – Church

by Readers Question

16:14 PM, 14th September 2017
About A year ago

Renting to Charity – Church

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Renting to Charity – Church

I have just been approached by church who want to rent my 4 bed house for 1-2 years for their Pastor.

Could I do normal AST with them? Is there any pitfall in that.. as the letting agent said we cant do any credit check etc as they are registered charity and they were not sure, and asked us to take call if we want to rent them or not.

Any advice will be appreciated.

Thanks

Gopal



Comments

Mark Alexander

16:15 PM, 14th September 2017
About A year ago

Have you considered renting directly to the Pastor and taking a guarantee from the Church?

Gopal Kedia

16:20 PM, 14th September 2017
About A year ago

Reply to the comment left by Mark Alexander at 14/09/2017 - 16:15
No I hadn't thought of that. Thanks I will explore this option !

Graham Bowcock

8:14 AM, 15th September 2017
About A year ago

Dear Gopal

If the Church want to rent the property themselves, rather than permitting you to let directly to the pastor, you cannot use an AST, so your agent is correct. The tenancy will just be a tenancy without protection of the Housing Act (for both parties), often known as a company tenancy or common law tenancy.

There is no reason why you cannot get references on a church or charity. Presumably they prepare some form of annual financial statement, no mater how small they are. If they don't or won't provide it then be very wary.

You must remember that from your point of view this is a commercial transaction. You are letting the property on agreed terms, including payment of rent, so you must make sure you are properly protected. I deal a lot with charities and churches and I am afraid there is a naivety in too many cases about things not applying to them. Wrong - compliance applies to everyone in the business.

You could get a guarantor if you are uncertain about the church's ability to meet its commitments; this could be the Pastor or some other committee member such as the treasurer.

If a two year let suits you and the terms are right then I suggest you push your agent a bit more to sort things out for your, rather than claiming it's too difficult.

Regards

Graham

Dale James

8:23 AM, 15th September 2017
About A year ago

Reply to the comment left by Graham Bowcock at 15/09/2017 - 08:14
Spot on graham, speaking as an agent myself, some agents will worry about anything other than an ast! Maybe you should consider an agent with the wisdom of having handled non housing act tenancies.

Mark Alexander

8:37 AM, 15th September 2017
About A year ago

The reason I suggested AST to Pastor is that it is simpler for both tenancy, referencing and compliance with mortgage T&C's.

For a commercial lease see our Rent to Rent template linked below.

https://www.property118.com/legal-advice-for-landlords/guaranteed-rent-to-rent-lease-contract-template-download/41817/

Gopal Kedia

9:05 AM, 15th September 2017
About A year ago

Thanks a lot Graham, it was really valuable.. I will speak to the church today and see what they say.

Freda Blogs

8:56 AM, 16th September 2017
About A year ago

Hi Gopal
In your position, I would look to agree a lease (not an AST) directly with the church (or better still, the Diocese), on the basis that a) most likely the church/Diocese rather than the pastor has greater financial resources, hence greater security for getting the rent paid, b) probably you will be able to agree a longer term arrangement, maybe 3 or 5 years, c) give you greater clarity over responsibility for repairs and maintenance - the church will in my experience be more likely to carry out the obligations than the individual.
Hope that helps.

Mark Alexander

10:09 AM, 16th September 2017
About A year ago

Reply to the comment left by Freda Blogs at 16/09/2017 - 08:56
Hi Freda

That would be fine if Gopal has no mortgage.

Lucy Fryer

20:42 PM, 17th September 2017
About A year ago

Don't let to the Church! The Church of England is the largest and most corrupt (apart from the catholic church) institution of our day. Don't give them a helping hand in any way.


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