Buying a Clubroom

[Geoff Endacott]

It looks as though Bentley MRG will be buying our own clubroom, thanks largely to Network Rail taking away the parking spaces at our current premises.

 

Does anyone have any (relevant) advice?

 

Thanks.

 

Geoff Endacott

[34theletterbetweenB&D]

Further to the good advice above. If not done already, then you will need to 'incorporate' as a society to have the legal standing to manage the ownership of property. Bit out of date on the 'articles of association' that I suspect are required to define your structure, purposes, membership qualifications and voting rights; all that has to be right before going any further. Seek qualified legal advice.

 

As far as any property is concerned, the biggest factor after affordability is its prospects for retaining value. If that's good, then it's a low risk proposition.

[Mike Bellamy]

 

Whilst the Dutch Master has given some good advice, as far as I am aware in English Law, property cannot be owned by a club (society, association etc). The deeds have to be in the name of Trustees and so you need a solicitor to drawn up a suitable trust deed. These would normally be Chair, Secretary, Treasurer and one other as I think the maximum is 4. We were very lucky in that our premises were cheap and bought without the need for outside funding but I don't think land held in trust is suitable security for a mortgage.

 

You will also need to consider your terms of membership - we had to change our Constitution as the Solicitor said that the old 'rules' were Ok for a group of friends meeting in rented property but were not sufficient for a club about to embark on a purchase. We now have a stricter requirement so that anyone wanting to leave the Club (for example) has to give notice in writing to the Secretary otherwise they will still be considered as a member until renewal time.

 

 

.

[duncan]

Mike, also ensure that there is written route if the club ceases as the building will be disposed of, either for a surplus / or deficit. 

[rovex]

You could always establish the club as a company limited by guarantee. But the best advice has to be to get a solicitor and seek his/her professional advice

[Geoff Endacott]

Thanks for the advice so far.

 

The premises will be bought by North Wiltshire Art Space Ltd which has four club members as its directors.

 

Members will be funding the purchase with individual loans. (We know that these will need to be tied up legally.)

 

We have yet to resolve what happens if the club should be wound up. When we had few assets it didn't really matter. We now face the prospect that over the course of several years we will begin to own equity in a significant asset.

 

Geoff Endacott

[rovex]

Generally on the winding up of a company any surplus after all debts are paid is returned to the members (shareholders)

[ELTEL]

You could always establish the club as a company limited by guarantee. But the best advice has to be to get a solicitor and seek his/her professional advice

That's exactly what we did at Stafford Railway Cirlce Ltd

 

It's I believe the only legal way a club can obtain a mortgage or lease a property and which protects its members.

 

Terry

[Kenton]

 

It's I believe the only legal way a club can obtain a mortgage or lease a property and which protects its members.

 

Correct, a limited company can own property. So incorporation, as sated above, is the way to go. But beware there are significant pitfalls and tax implications.

 

I would agree seek the advice of a solicitor, though my experience of solicitors has been that they haven't a clue about tax, accounting or setting up limited companies. Expect them to handle the deeds and to review the articles of incorporation. But for the process of incorporation get the accountant to deal with it.

 

Rules on membership, guarantors and shareholding are complex and full of traps to snare the unwary.

 

Remember most of all plan for the distant future. You may be all friends today but life can be shorter than expected, friendships certainly are.

 

Hope you find somewhere big enough to house all the layouts and to hold big celebration parties / open days.

[Ian Fisher]

I​n Certain Boroughs community groups can look to claim a reduction in Council tax. in certain Boroughs a charity, ltd company not for profit , etc could be zero rated.

 

The ownership issue  really needs to be with the group itself.

 

 

As for governance their are model documents available in the public domain, which can be amended and made fit for purpose.

 

There are a number of options and models you can look to adopt.

 

I would also look to make contact with your local CVS who maybe in a position to offer advice (at a better rate than our legal friends) that could offer advice locally about community ownership

 

feel free to contact me if I can offer further ideas.

[Mike Bellamy]

 

 

I​n Certain Boroughs community groups can look to claim a reduction in Council tax. in certain Boroughs a charity, ltd company not for profit , etc could be zero rated.

For many years we had discretionary rate relief which meant that no rates were payable. Every few years the city Council would ask us to reapply and it was always granted until the recession hit and they had to look more carefully at their expenditure. We had to supply our accounts and detail who we were and what we did. The end result was that the rate relief was refused as we did not show any evidence of financial need and they did not consider that our aims were of benefit to the wider community. However we still don't pay anything as 'Small Business Rate Relief' applies but this is money from central government rather than from the local council.

 

.

[Geoff Endacott]

What have we done?

 

We have put in an offer for an industrial unit in Calne which the vendor has accepted - subject to contract, of course.

 

We have already established that we will get a discount of 80% on the rates leaving us with about £300 p.a. to pay.

 

A solicitor is being appointed and an accountant is lined up as well.

 

We now have to work out what to do with 2,900 sq ft.

 

Many thanks for the advice so far.

 

Geoff Endacott

[The Stationmaster]

One thing you could do with that sort of space is hold a club open day every year.

[Geoff Endacott]

One thing you could do with that sort of space is hold a club open day every year.

 

...or more often.

 

Geoff Endacott

[David Bigcheeseplant]

Are you buying your unit or renting it?

 

Athough we are in no danger of loosing a clubroom increasing numbers of members mean we would like a bigger clubroom on a seven days access normally we only meet on a Friday and once a month on a Saturday, although our location in one of the most expensive parts of the country finding sutible land is not that easy!

 

David

[Geoff Endacott]

Are you buying your unit or renting it?

 

Buying - funded by loans from members.

 

Geoff Endacott

[pointstaken]

In the event of fallout between members, how will you repay the loans, and in what order ?

 

Dennis

[Geoff Endacott]

In the event of fallout between members, how will you repay the loans, and in what order ?

 

Dennis

 

Who said anything about repaying the loans?

 

Joking aside, we have more than enough to cover the cost of the building and others waiting to step in should any of the original funders drop out. The fall back position is a commercial mortgage. It's just that loans from members are cheaper leaving us with more to spend on the layouts.

 

Geoff Endacott

[Geoff Endacott]

We have done it.

 

Bentley Model Railway Group are now the owners of Unit 15 Harris Road in Calne.

 

We now own this: http://mwwilts.co.uk/propertyDetailsCommercial.php?pid=490631 .

 

Tomorrow morning a big van should be arriving to collect most of the layouts. Luckily we are only moving eight miles as we will need to make several trips.

 

We can't make the final move until next month as there is a certain amount of building work required at the new clubroom. Most importantly we have to fit a suspended ceiling to improve the fire safety in the building. New lighting is needed, as is a disabled toilet, We also need to move a door.

 

Now for the arguments over how to make use of 2,912 square feet.

 

Geoff Endacott

[royaloak]

First thing would be to insulate it heavily, you dont want temperature variations b-ggering up the layouts or models, oh congratulations on your new addition.

[Scottish Modeller]

We have done it.

 

Bentley Model Railway Group are now the owners of Unit 15 Harris Road in Calne.

 

Now for the arguments over how to make use of 2,912 square feet.

Hi Geoff,

 

First - Congratulations to the club for managing to achieve this!

 

On the score of 'How to use floor space....

 

An idea we had win the past to resole this was to allocate each paid up member a proportion of the space.

 

I think we used a formula - which I am trying to remember!

 

It went something like this.

 

Total all available sq m. Take off required area for coffee area/library/toolroom/storage.

 

This leaves available sq m for layouts.

 

Each full member value = 1 x number of years of membership.

 

Take total number this gives and divide into sq m to give each members entitlement.

 

Then add members total together according to scale they work in.

 

This then gives some sort of space allocation to each scale

 

Or something like that....

 

Then let them fight it out!

 

Thanks

[polybear]

I favour hidden trenches lined with with Pungi Sticks.  Not sure about the sprinkler system though - the layouts may not thank you for it   

[Colin_McLeod]

Congratulations Geoff and friends. May ye all have many years model railway pleasure from this venture.

Colin

[Black Sheep]

I​n Certain Boroughs community groups can look to claim a reduction in Council tax. in certain Boroughs a charity, ltd company not for profit , etc could be zero rated.

 

The ownership issue really needs to be with the group itself.

.

Up at pendle forest we hold a charity exhibition at the church across the road, entry fees go to the church (who are registered as a charity) for their community work, food sales cover our costs (we're registered as a charity too)

 

We also have a small layout we can take in to schools, scouts etc to talk about rail safety as BTP don't have the time anymore.

 

These two activities seem to fulfil our local councils criteria of benefiting the community

[Geoff Endacott]

First thing would be to insulate it heavily, you dont want temperature variations b-ggering up the layouts or models, oh congratulations on your new addition.

 

That's not actually a priority because the need for additional insulation wasn't even mentioned on the energy performance report.

 

The unit is in the middle of a block and so far temperature variations have not been a problem.

 

Geoff Endacott