Agenda item

(Asset Management & Economic Development Portfolio Holder) To consider the attached report (C-005-2014/15).

(1)        That the sale of the Council’s freehold interest in Lindsay House (15 Lindsey Street, Epping) on the open market be agreed in principle;

(2)        That a marketing exercise, including an invitation to offer from the Theydon Trust, be undertaken inviting bids based on:

            (a)        a sale as a single dwelling; and

            (b)        a conversion of the property to flats;

(3)        That the Portfolio Holder for Asset Management & Economic Development be authorised to:

            (a)        consider the results of the marketing exercise and determine the basis      on which the property was to be sold against the covenant restricting use of      Lindsay House for a single dwelling house or home for elderly persons;

            (b)        consider, in the light of the offers received, if there would be financial          benefit to the Council in seeking to remove the covenant and then remarket the property; and

            (c)        approve, subject to (b) above, the highest offer received for the       property or seek to remove the covenant.

The Portfolio Holder for Asset Management & Economic Development presented a report on the disposal of Lindsay House at 15 Lindsey Street in Epping.

The Portfolio Holder informed the Cabinet that the Abbeyfield (Epping) Society had surrendered their 125-year lease of Lindsay House as it was surplus to their requirements and they were unable to assign the lease due the restrictive user clause; there were covenants restricting the use of the property to a single dwelling house or a home for elderly persons. The property had been vacant for a number of years and the Society had paid the Council a sum of £7,002 in lieu of external dilapidations. There was current interest from the Theydon Trust to use the property as a house for elderly persons with the addition of social housing, and the property could be suitable for conversion to flats, provided the covenant could be removed. To remove the covenant, the Council would need to either: seek the agreement of the current beneficiary i.e. Epping United Reform Church; consider insurance cover, which was only usually given when the covenant was old and the beneficiary unknown neither of which was applicable in this case; or apply to the Upper Tribunal to release the covenants, however this ran the risk of the Tribunal ordering that compensation should be paid to the current beneficiary.

Therefore, the Portfolio Holder requested the Cabinet to authorise the sale of the Council’s freehold interest in principle and a marketing exercise be carried out inviting bids for sale as a single dwelling house or conversion to flats. The Theydon Trust would be invited to bid. In addition, the Portfolio Holder sought authority to consider the results of the marketing exercise and determine the basis on which the property was to be sold, including whether there was any financial benefit to the Council in attempting to remove the covenant, and either approve the highest offer received or seek to remove the covenant. The Director of Governance highlighted to the Cabinet the difficulty in estimating the cost of removing the covenant from the property as it was ‘recent’ and there was a beneficiary (which also precluded obtaining insurance) but reassured the Cabinet that the Portfolio Holder would be provided with all the relevant and available information when a decision was made.

Decision:

(1)        That the sale of the Council’s freehold interest in Lindsay House (15 Lindsey Street, Epping) on the open market be agreed in principle;

(2)        That a marketing exercise, including an invitation to offer from the Theydon Trust, be undertaken inviting bids based on:

            (a)        a sale as a single dwelling; and

            (b)        a conversion of the property to flats;

(3)        That the Portfolio Holder for Asset Management & Economic Development be authorised to:

            (a)        consider the results of the marketing exercise and determine the basis      on which the property was to be sold against the covenant restricting use of      Lindsay House for a single dwelling house or home for elderly persons;

            (b)        consider, in the light of the offers received, if there would be financial          benefit to the Council in seeking to remove the covenant and then remarket the property; and

            (c)        approve, subject to (b) above, the highest offer received for the       property or seek to remove the covenant.

Reasons for Decision:

To receive a valuable capital receipt of approximately £800,000.

Other Options Considered and Rejected:

To seek a new tenant within the restrictive user clause permitted by the Covenants.