Consideration was given to the report of the Portfolio Holder for Assets & Planning which sought agreement from the Cabinet for a new Lettings Policy to replace the 2005 Lettings Policy for SHDC’s industrial units.
There was some discussion around the issue of tenants occupying smaller units for long periods of time. These would have been let predominantly for start-up businesses so long term occupation was not the intention. It was explained that the new policy would address this issue by not providing tenants with an automatic right to renew their tenancy. However, members commented that if tenants were not to remain in smaller start up units for long periods of time, to enable units to be available for new entrants, there would need to be a supply of alternative units for that business to move to.
In response to a question about whether under the proposed replacement Lettings Policy subletting would be permitted, officers confirmed that a sublet of whole or part would not be permitted. Tenants would have the ability to assign their lease or discuss with the Council, as landlord, handing back their unit for re-letting If they no longer required occupation. The new policy was intended to provide flexibility to officers to manage the estate effectively and work with tenants. This could include some units being let to more than one business in order to accommodate a number of start-ups working closely together in a single unit.
1) That the draft new Lettings Policy for SHDC’s industrial units, details of which were set out in the report, be approved; and
2) That the updating of the officer delegation detailed at section 3 in the report, for the letting of industrial units, be approved, with a simplified version, to read:
“To grant industrial unit tenancies which meet the lettings criteria and determine the terms of the lease within the framework of the approved policy.”
(Other options considered:
· Option 2: To do nothing – The current policy was out dated, did not reflect current market terms and did not meet the strategic aims of the Council. It was recommended that the policy was renewed in order to effectively let and manage the council’s industrial units.
· Option 3: To seek a rewrite of the draft Policy referred to in the report and the report be presented again to Performance Monitoring Panel and Policy Development Panel – the new policy reflected modern commercial practices and had been drafted on this basis. A rewrite and reference back to the Panels would mean a delay in it being implemented and serve no purpose.
Reasons for decision:
· The policy was simple and relatively high level. Officer delegations to be updated to allow officers more flexibility for negotiating terms on behalf of the Council, on commercial terms that reflected current market practice.
· Due to the simplicity of the policy, it was resilient to future changes, therefore reduced the requirement for constant review.
· The new precedent lease format which would be familiar to those who had leased property in the private sector.)