Best Practices for Parsonage Sales or Renting
Best practices and considerations for selling or renting a parsonage, including reasons to sell, real estate market insights, pros and cons, and adherence to Book of Discipline guidelines.
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Presentation Transcript
Best Practices for Parsonage Sales or Renting James Brown Conference Treasurer Eastern Pennsylvania Conference of the UMC & George Monk, Financial Secretary Chevy Chase UMC and Board Member MAUM Foundation MidAtlanticFoundation.org
Selling the Parsonage Why sell the parsonage? The local church cannot afford the maintenance expenses The pastor owns a home The pastor is part-time
Selling the Parsonage What is the landscape for the local Real Estate Market? Availability of homes if the local church needs to provide a parsonage in the future. Ability for the pastor to buy and then sell a home in this area. Rental options Will the pastor live in the local community?
Selling the Parsonage Pros No maintenance expenses. Lower insurance cost. No inspections required. Cons Must maintain the capacity to provide a parsonage in the future. Must provide a Housing Allowance No assurance Pastor will live in the local community
Selling the Parsonage Follow the Book of Discipline Para 2540 Unincorporated Local Church Property Sales Para 2541 Incorporated Local Church Property Sales Para 2542 Disposition and Mortgage of Church Parsonage Para 2543 Restrictions on Proceeds from Mortgage or Sale
Para 2540 & 2541 Notify District Superintendent to set-up review by the District Board of Church Location and to set the date for a Charge or Church Conference. Give notice at least ten days before the scheduled Charge/Church Conference from the Pulpit and from at least one other source of communication i.e. bulletin, newsletter, email notice
Para 2540 & 2541 Any two officers of the Board of Trustees are duly authorized to sign any necessary written documents to carry out the direction of the Charge/Church Conference. The signatures are binding on the Local Church.
Para 2542 Disposition of Parsonage The District Superintendent must sign consent to the action taken by the Charge/Church Conference in order to release the property from the Trust Clause and provide clear title to the buyer of the property.
Para 2543 Restrictions on Proceeds of Sale Cannot be used for current operating expenses including housing allowance. Can be used for Capital Improvements only if adequate provisions have been made to meet the housing needs of the Pastor (requires consent of the District Superintendent and the Pastor)
Para 2543 Restrictions on Proceeds of Sale Can be used for aiding in the construction of a new church Can be used for Congregational Development if a 3-5 year plan is presented and approved by the Annual Conference.
Selling the Parsonage Should the church get an appraisal? List the property ourselves or hire a broker? Will we make any necessary repairs or sell as is? What member of the Trustees will receive offers and communicate to the full Board?
Investment Plan Proceeds should be invested to maximize the return in support of the housing allowance. Formalize an Investment Policy. Will the local church manage in-house or have an independent manager?
The Mid-Atlantic United Methodist Foundation can assist you in developing an Investment Plan and can also manage the investment of the proceeds from the sale of your parsonage. www.midatlanticfoundation.org
Renting the Parsonage : What is Typical Rent in your community? Will it cover Property Taxes, Housing Allowance, other costs?
Some Expenses To Consider Painting - inside and/or outside Refurbish floors; chimney cleaning; roofing repairs, Replace appliances Replace fire detector/CO2 detectors Supply fire extinguishers
Regulations Rental Housing License Lead Paint Inspection and Updates to County and State Property Tax Assessment Supply Fire Extinguishers Church Insurance covers Parsonage Structure only
Rental Agreement Work with Realtor who has Agreement and will find renters They can help with advertising and vetting potential renters You will pay a relatively small fee
Rental Considerations Lease should be for two months notice by church or renter An escrow account must be set up with one month s rent Renter must have renter s insurance Will you allow smoking? Will you allow cats and dogs?
