SECTION 106
CLAWBACK – MINOR
Definitions
“Additional Profit”
means the actual additional profit of the Development
Proposal to be calculated in accordance with
paragraph A9
"Appraisal"
means a financial appraisal of the Development
Proposal as referred to in clause A3
"Development Costs"
means the aggregate sum of the cost of the items (as
listed in paragraph A10) incurred or projected to be
incurred in relation to the development of the Site
"Disposal"
means disposal of the whole or substantially the whole
of the Site affected
"Market Recovery Scheme" means the Council's measures in its approach to
negotiating community benefits to help stimulate the
local economy within the existing planning policy
framework established by the Local Development
Framework
"Practical Completion"
means the issue of an Owners Certificate of Practical
Completion by the Owners' architect or in the event
that the Development is constructed by a party other
than the Owners the issue of a Certificate of Practical
Completion by that other party's architect
"The Total Cap"
means the sum of
pounds (£
).
The Total Cap shall be index linked to the date of
payment by increasing the specified sum in
accordance with the formula set out in clause
"The Valuer"
a valuer jointly appointed by the Owner and the
Council and having sufficient expertise to carry out the
Appraisals
A.
Owners Obligations
A1
Within twenty four months from the date of the Planning Permission
complete the
as required by the Market
Recovery Action Scheme to enable the Development Proposal to benefit
from the Market Recovery Action Scheme
A2
Upon disposal of the ___th unit immediately commission the Appraisal; or
A3
In the event that the Appraisal as agreed between the Owner and the
Council (or in the absence of such agreement the details agreed by an
Independent Arbitrator) reveals the Additional Profit up to The Total Cap that
would have otherwise been required under the Council's Supplementary
Planning Document "Planning Obligations and Affordable Housing First
Review 2010" along with the associated Market Recovery Plan shall be paid
by the Owner to the Council PROVIDED THAT this Additional Profit shall be
used towards the delivery of community infrastructure in line with adopted
planning policy
A4
The Total Cap shall be index linked to the date of payment by increasing the
specified sum in accordance with the formula set out in paragraph 7.17.
A5
The scoping of the content and process of the Appraisal shall initially be
discussed and agreed with the Council and then submitted in writing for
approval by the Council such approval on the scoping of the Appraisal shall
be undertaken within 28 days working days from receipt by the Council
A6
The Appraisal shall include:
(i)
the Owner's certified details of all the actual or projected (as might be
the case) Development Costs including receipts for all payments
made
(ii)
the gross income from the sale rental or disposal of the Development
Proposal on a unit by unit basis
A7
In the event that projected costs or revenues are used in the Appraisal they
will be based on evidence provided by the Valuer with the agreement of the
Council
A8
Where a payment has become payable pursuant to clause A4 it shall be
paid to the Council within 28 days from the date on which the Appraisal has
been agreed by the Council or by the Independent Arbitrator as the case
may be
A9
The Additional Profit (if any) shall be ascertained in accordance with the
following formula:
AP = AR – AC –
% of the Development Costs
where
AP = Additional Profit
AR = Actual or projected Revenue
AC = Actual or projected Development Costs including the land acquisition
cost
A10
Development Costs are the aggregate of such items of gross cost borne in
relation to the Site as may reasonably have been incurred in relation and
incidental to the acquisition disposal development and management of the
Site or part of the Site until the date of any of the Appraisals such items to
include but without limitation:
(i)
the cost of acquisition of estates and interests in the Site (to exclude
any known site constraints such as any demolition stripping out site
clearance works along with works of construction refurbishment or
improvement)
(ii)
stamp duty land tax and Land Registry fees
(iii)
the cost of extinguishment modification or variation of any interests or
rights in over or against the Site including (but not limited to) any
break or other payment made to the tenant or licensee to terminate
any lease tenancy or licence of the Site or any part thereof held by a
person who by the lawful exercise of his powers could prevent restrict
or impede the carrying out or progress of the Development Proposal
or its use and enjoyment of the Site
(iv)
the cost incurred of acquiring additional land or rights for the
improvement and enhancement of the development potential of the
Site (excluding demolition costs as mentioned in A10 (i))
(v)
the cost of obtaining requisite planning permissions building
regulations consents licences and approvals including previous
permissions to carry out a development even if a development is not
begun or for the improved use and enjoyment of the Site
(vi)
the cost of planning or other such obligations imposed by a
competent authority as a condition of carrying out the Development
Proposal or improvement of the Site including (but not limited to) all
sums paid pursuant to this Agreement
B.
(vii)
interest paid on loans or other monies to finance or fund the
Development Proposal
(viii)
guarantee fees commitment fees procuration fees finance charges
and brokerage fees payable in respect of loans and other monies to
finance or fund the Development Proposal
(ix)
legal surveyors and other professionals fees agency commission
advertising marketing promotional expenses and other costs in
connection with the matters referred to in the foregoing paragraphs
(x)
fees paid to a project manager and persons providing management
services and the cost of staff employed by the Owner exclusively for
the performance of duties in relation to the Site
(xi)
rental deficit payments to a person under a forward sale or other
funding arrangement
(xii)
rent payable by the Owner under a lease of the Site
(xiii)
the cost of insurance of the Site
(xiv)
value added tax on supplies of goods and services relating to the Site
to the extent that it is not recoverable by credit against output tax or
repayment by the Commissioners of HM Customs and Excise
(xv)
any other costs expenses or charges reasonably incurred in carrying
out the Development Proposal
Obligations on the part of the Council
The Council hereby covenants with the Owner as follows:
B1
To review the Appraisal within 28 working days of receipt either to confirm
that it accepts the Appraisal as fair and accurate or if it does not approve the
Appraisal or any part of the Appraisal then it shall notify the Owner
accordingly but if the Council does not so confirm or notify within the said
period of 28 working days then the Council shall be deemed to have
accepted the Appraisal
B2
If the Council notifies the Owner that any part of the Appraisal is not agreed
by the Council within 28 working days of receipt of the same then either the
Owner or Council may refer the Appraisal to an independent arbitrator for
determination pursuant to clause 7.19
B3
Upon agreement by the Council of the Appraisal (or as determined by the
independent arbitrator in the absence of such agreement):- if the Appraisal
shows that the Gross Development Profit does not exceed
percent
(
%) of the Development Costs (or projected development costs) then
the Owner shall be released from clauses A4 and A9 of this Agreement
B4
If expenditure of any one or more of the contributions required to be made
pursuant to this Agreement has not been fully committed within fifteen years
of the date of its receipt by the Council (including the Additional Profit) then
the relevant contribution or any uncommitted balances as may be
appropriate shall in each case be repaid to the Owner together with interest
from the date of receipt by the Council until the date of repayment at the rate
of the current National Westminster Bank Plc basic rate that shall have
accrued thereon
Section 106 Clawback – Minor (RSN 9387