Decision details

Approval to grant leases outside of the Councils current Lettings Policy.

Decision Maker: Portfolio Holder for Communities and Facilities

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: Yes

Purpose:

To authorise the granting of leases outside of the lettings policy in advance of a fuller comprehensive lettings policy review


Decision:

Grant the Technical Projects Coordinator and the Property Assets Manager permission to negotiate and conclude terms which may fall outside of the current lettings policy, as an interim whilst a full review of the lettings policy is undertaken.

 

Reasons for the decision:

·        There are currently 6 void units, 5 of which are now under offer. Terms for these have been negotiated on the basis of more modern commercial terms and in anticipation of a new lettings policy. The recommended replacement lettings policy, when drafted and presented to Members, will provide for greater flexibility for Officers to negotiate the best terms for that unit at that time, rather than by a policy which constrains such flexibility. Letting vacant units now will provide a much needed revenue stream for the Council and reduce Council liabilities on vacant units.

 

·        By agreeing to greater flexibility for example contracting out of the security of tenure provisions of the Landlord and Tenant Act 1954 will remove the tenant’s right to automatically renew their lease. By doing so, an opportunity then arises, on expiry, for the Council to grant a new lease in line with new market conditions, as determined, at that time

 

Alternative options considered:

·        Do Nothing – The existing commercial unit lettings policy does not provide sufficient flexibility to negotiate and conclude terms reflecting a more modern approach to letting commercial property of this nature. As a consequence, the scope for officers to negotiate and for leases to be granted, adopting these terms, falls outside of that policy. The Council has offers for units which do not comply with the policy, for example granting tenancies to businesses which do not fall into the definition of start-up or are on shorter more flexible lease lengths than those prescribed in that policy. There is an increased risk that offers will be retracted and the units will remain unlet if this flexibility is not in place. This could lead to a loss of income and could cause reputational damage for the Council as leases could not be granted on terms that reflect more modern approaches and suit both the Council as landlord and proposed tenants. Not Recommended

 

·        Refuse approval and grant leases on existing terms – granting of leases in accordance with the existing approved 2005 policy will result in leases being given security of tenure and tenants having to take a minimum of a 3 year term.  This is not the way Officers recommend the Council manages its commercial property portfolio now and in the future. Having for example the automatic right to renew their lease on expiry i.e. the current approach reduces the Council’s flexibility at the end of the lease term.  Not recommended. 

 

Interests and Nature of Interests Declared:

None.

Conflict of Interest: None.

Dispensation Granted: None.

Contact: Rachael Hunns, Asset Project Officer Email: RachaelHunns@sholland.gov.uk.

Publication date: 11/07/2019

Date of decision: 11/07/2019

Effective from: 19/07/2019

Accompanying Documents: