Appendix
North Warwickshire Borough Council
PROPERTY PROCEDURES
Scope
This protocol applies to all disposals of Council land and buildings and is subject to the
detailed rules in the Council’s Standing Orders.
1.
General Principles
1.1
Councils are subject to constraints when they come to sell land in their ownership.
Some of these are enshrined in law; others arise because of a general expectation
that local authorities should be seen to act fairly when disposing of land. Local
authorities should, as a rule, sell land for the best available consideration. Land
dealings by local authorities attract keen public interest and procedures must be
clearly defined. This Protocol is designed to ensure that land disposals are fair and
transparent and that the Council receives the best consideration that can reasonably
be obtained. There are a variety of methods by which land may be marketed. These
include:
Formal Tendering – the Council invites sealed bids, which are opened together.
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Informal Tendering – the Council invites offers, which are opened together
immediately following the closing date for the bids specified in the Tendering
process. If a higher unsolicited offer is subsequently received all parties may be
asked to resubmit.
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Private Treaty – this is where negotiations are carried out between the Council
and one other party due to the particular circumstances of the case.
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Auction – the property is marketed as part of the auction process.
1.2
Land/property disposals will normally be done through a competitive tendering
process by open advertisement on the market, wherever there is likely to be more
than one potential purchaser.
1.3
The method of marketing will be determined by the Corporate Property Officer in
compliance with this Protocol and in consultation with the Solicitor to the Council.
1.4
Occasionally, a limited marketing exercise may be used where the land or property
has already been subjected to open market testing or following short-listing after an
initial expressions of interest exercise.
1.5
Where appropriate, sales may be conducted by private treaty where a marketing
exercise has failed to secure a buyer, or where the particular circumstances of the
case are such that the Council is of the view that this is the most appropriate way to
proceed.
2.
Exceptions to the General Principles
2.1
For certain types of property open market advertising may not achieve the best
consideration. For example:1
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2.2
2.3
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Sales of small areas of land where there is realistically only one potential
purchaser, for example, sales to adjoining owners.
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Sales of land where there is a ‘special purchaser’ for whom the land has a higher
value than for anyone else, for example, “ransom strips” under the Stokes v
Cambridge principle.
Occasions arise where the Council wishes to support or encourage a specific use or
development. In these instances sales will be negotiated to particular purchasers.
Examples are:
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Sales to Registered Social Landlords (RSLs)
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Sales to developers or companies for industrial/commercial development to
create new employment opportunities or protect existing jobs.
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Sales to religious/community/voluntary groups to meet a local need.
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Sales to selected partners in specific areas. Appendix 6 to the Contract Standing
Order provides guidance on partnering.
For direct negotiations with a particular developer the Council may require the
following information from the developer:
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2.4
The provision of detailed information and plans of the proposed development.
The timescale for completion of the development.
Detailed funding arrangements and confirmation that these are in place.
Evidence of end user commitment and the opportunity for the Council to discuss
that commitment directly with the end users.
Details of the developer’s financial offer for the property.
Developer’s track record with similar developments.
Any partnership record with other local authorities.
Full details of any proposed joint venture opportunity.
Details of any conditions precedent to which the proposal is subject.
Any wider/longer term regeneration benefits from the proposal. For example,
employment or training opportunities during construction or from the proposed
end user.
Provision of any other off site benefits or facilities.
Potential for attraction of shoppers/visitors/users to the district’s facilities.
Capacity of the proposal for bringing other sites forward or opening up other
development potential.
Potential for leverage of private/other public funds and grants.
Capacity of the proposal to remove or reduce other Council financial liabilities.
Contribution to all the relevant Council policies, including the Sustainable
Community Strategy, the Local Area Agreement, and Local Development
Framework, Corporate Plan.
The above information will be assessed against standard criteria:
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Are there other developers who could deliver the project?
What other potential uses are there for the site?
Is there a robust and justifiable case for direct negotiation and not market testing
in accordance with the protocol?
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2.5
Developers will be required to enter into legally binding agreements to ensure that
the development proposed and associated regeneration benefits are delivered.
3.
Masterplans / Area based Regeneration
The Council recognises the importance of ownership, use and occupation of assets
in delivering regeneration objectives whether as part of an area regeneration
programme or individual projects.
3.1
In area based regeneration initiatives and Masterplan areas where the Council
wishes to work with a partner or partners to secure a common agreed goal, sales to
those partners or transfers into the partnership within the area may be directly
negotiated to further the aims and objectives of the Partnership or Joint partnership
arrangement. Such sales or transfers and the contribution they will make to
furthering the agreed aims and objectives will be identified at the outset.
3.2
Once a partner is selected, the following points need to be considered:
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All proposals to acquire or dispose of land and buildings will be dealt with by the
Council.
The statutory basis under which the Council holds the land must be identified.
Likewise, the relevant powers under which the land is to be disposed of need to
be identified.
If the land is public open space, both the requirements of the Green Space
Strategy and the appropriate statutory advertising procedures need to be
complied with.
In all cases the open market value of the land or property should be established.
An independent valuation may be required depending upon the circumstances of
each case.
If the sale is to be at an undervalue either a general or specific consent from the
Secretary of State will have to be in place to enable the Transfer to proceed and
all conditions complied with.
4.
Statutory Requirements on Best Consideration
4.1
The Council has a statutory duty under Section 123 of the Local Government Act
1972 not to dispose of land at less than the best price reasonably obtainable unless
the consent of the Secretary of State has been obtained.
4.2
For all methods of disposal, the Council must be able to demonstrate the
achievement of best consideration to this end:
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Land and property disposals will be carried out or commissioned by the Council’s
Valuer, whether the disposals are by open marketing or by negotiation. A
reserve price can be put on any property being offered for sale at auction.
Selected negotiated disposal terms maybe subject to independent valuation.
Selected development opportunities will be market tested to establish up to date
valuation benchmarks.
The assessment of best consideration may take into account any additional
benefits to the Council to which monetary value can properly be attributed which
is capable of being assessed by a qualified valuer.
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Where the consideration agreed represents less than best consideration, advice
must be obtained from the Solicitor to the Council that the Council has the
relevant legal powers to accept the consideration.
5.
Disposal Procedures
5.1
The following procedures will be followed in all proposals for disposals of land and
property:
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Details of ownership are verified at the outset.
The Solicitor to the Council or the Resources Board is responsible for declaring a
property surplus to requirements having consulted the Corporate Property Officer
and taken into account the principles of good asset management.
Planning potential for changes of use/development is fully established prior to
disposal.
Ward Councillors are always informed of proposals to dispose of property within
their ward.
A detailed valuation is prepared and approved prior to disposal.
Detailed terms and conditions for the disposal are prepared in advance of sale
and drawn to the attention of prospective purchasers.
Adequate security measures are maintained during the disposal process to
ensure probity and integrity.
Procedures for the receipt and opening of tenders/offers are followed in all cases.
6.
Consultation and Decision Making
6.1
Ward Councillors
Ward Councillors are notified of all proposed land and property disposals in their
Wards and their comments reported to the Resources Board.
6.2
All Councillors
Where it is proposed to make a “major disposal” as defined by the Contract Standing
Orders, all Borough Councillors will be consulted on the proposal. This reflects the
fact that all land holdings are assets of the Borough, rather than a particular area. It is
proposed that the definition of “major disposal” in the Contract Standing Orders be
changed from £52,000 to £80,000, given that this figure has not been changed for a
number of years.
6.3
Wider Consultation
Some schemes will be so significant as to require wider consultation. Where the
valuation of the asset being disposed exceeds £250,000, notice will be given to the
Parish/Town Council for the area in question and if time allows the matter would be
discussed at the relevant Area Forum.
In addition, an advert will be placed in a newspaper circulating in the area or a press
release issued and on the Council’s website inviting residents to make written
representations. The Council may, in addition or instead of placing an advert/issuing
a press release organise an open day to publicise the proposals to the general
public.
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6.4
Exceptions
These procedures will occur in the majority of cases however the Council must be
able to deviate from these consultation requirements where exempt information, as
defined by Schedule 12A of the Local Government Act 1972, is involved or publicity
at a particular stage of a disposal would prejudice the sale. The Resources Board
may therefore be requested to dispense with or delay the use of any aspect of this
paragraph.
7.
Disposal of a Revenue Earning Asset
7.1
Where it is proposed to dispose of a revenue earning asset the Director of Resources
and relevant service Assistant Director must be consulted to assess the revenue
implications and any action necessary to offset these.
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