Strategy & Procedures For The Disposal OfSurplus Land & Property and the Acquisition of Land and Property2012 - 2015

www.blaenau-gwent.gov.uk

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CONTENTS

1.0 INTRODUCTION

2.0 DISPOSALS

3.0 IDENTIFICATION OF SURPLUS ASSETS

4.0 PROCEDURE FOR DISPOSAL OF SURPLUS ASSETS

5.0 MONITORING OF DISPOSAL OF SURPLUS ASSETS

LIST OF APPENDICES

APPENDIX 1 - LAND/PROPERTY APPLICATON FORM

6.0 PROCEDURE FOR THE ACQUISITION OF LAND AND PROPERTY

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1.0 INTRODUCTION

1.1 This strategy is the outcome of a review of the Strategy and Procedures for the Disposal of Surplus Land and Property 2005 – 2008.

1.2 The review has been widened to look at a Strategy to introduce procedures for the acquisition of properties in support of the Council’s functions.

1.3 The principal aim of this Strategy is to provide a consistent process and framework to be followed with regard to the acquisition of land and property and disposal of surplus assets.

Essentially this Strategy will:-

(a) Act as a reference point for procedural matters when managing the acquisition and disposal of the Council’s surplus Land and Property Assets.

(b) Ensure that the Council is consistent in its dealings in relation to property matters.

(c) Ensure that Best Practice is taken into account when managing the acquisition and disposal of the Council’s surplus Land and Property Assets.

(d) Ensure that the Council meets the requirements of current legislation in relation to Local Authority property management, in particular, the Local Government Act 1972, General Disposal Consent or any subsequent revisions.

These regulations prescribe that a Council shall not dispose of land for a consideration less than the best price that can reasonably be obtained. The General Disposal Consents do, however, grant exceptions in certain circumstances.

(e) EnabletheCounciltoactinanefficientandeffectivemannerwhenrespondingto requests from the general public in relation to its property portfolio.

(f) To reduce the liabilities associated with holding and managing a large land and property portfolio.

2.0 DISPOSALS

2.1 This procedure sets out the framework to be followed in relation to the disposal of land and property.

2.2 This Disposal Strategy shall not apply to the following:

(a) the sale of Council dwellings under the Housing Acts;

(b) the sale of Freehold Reversions under the Leasehold Reform Act 1967;

(c) the sale of Freehold Reversions to Lessees not entitled under the Leasehold Reform Act 1967;

(d) repossessed properties and surplus non-housing revenue account dwellings which are advertised for sale inviting formal tenders or sealed offers.

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(e) Properties acquired by the Council or predecessor authorities using Compulsory Purchase Powers, where the Crichel Down rules may apply.

(f) Sales or disposals as a result of the exercise against the Council of Statutory Powers, Compulsory Purchase Powers or decisions of the Lands Tribunal or Awards of Court.

2.3 Sections of this Disposal Policy, at the discretion of theChief LegalOfficer shall notapply to small areas of land where only one prospective purchaser in the market could make purposeful use of the land in question, (i.e. a parcel of land adjoining a prospective purchaser’s own property).

2.4 This Strategy will apply to all applications received by the Council after 1st April, 2005. Any application received prior to this cut off point will be dealt with in accordance with the Standing Orders for the Disposal of Land as approved by the former Borough Council on 30th June, 1994.

3.0 IDENTIFICATION OF SURPLUS ASSETS

3.1 IdentificationofsurplusCorporateAssetsshouldfollowtheguidelinesandprocedureasset out below.

3.2 In line with the Corporate Asset Management Plan, the Estates Section and Asset Management Section will engage with service departments to review operational property requirements in response to service delivery and transformation and to identify any surplus land/property for disposal.

3.3 Thedefinitionofsurplusland/propertyiswhentheServiceDepartmentnolongerusesan

asset for the use for which it was originally acquired or held.

3.4 From the date when the Asset is declared surplus until such time as it is sold, all ongoing revenue costs will be the responsibility of the department releasing the asset.

3.5 When developing a project for the replacement or rationalisation of a service which involves the closure of a facility, the Council will at the Planning stage for the replacement facility:-

(a) Have regard to any statutory processes which may apply to the particular service and consult and identify the future use of the property, which will become effective immediately upon the closure of the facility being replaced.

(b) Identify funding as part of the project plan to deal with the demolition and management costs (if appropriate) of the property being replaced.

3.6 The Estates Section and Asset Management Section will assess demand for the use of the property from internal partners, and market demands and will request information on anylegalandplanningrestrictions,financearrangements,(e.g.clawbackprovisions).

3.7 As far as the internal re-use of a property is concerned the Estates Section in conjunction with Asset Management Sections will assemble all relevant information. A report will then be submitted to Corporate Asset Management Action Working Group for a decision or to CMT or Executive in the case of more complex or controversial cases.

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3.8 As far as disposals are concerned, the Estates Section in conjunction with the Asset Management Sections will assemble all relevant information and a report will be submitted toeithertheChiefLegalOfficerforadecisionunderdelegatedprocedures,ortoExecutiveinmore complex or controversial cases. The flowchart at 3.9 illustrates the decisionmaking process with the table at 3.10 being a checklist for the decision making process.

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3.9 Flow Chart of Procedure for Identification of Surplus Assets

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3.10 Checklist of Decision Making Process

3.10 Checklist of Decision Making Process

STATUS

SITUATION

DECISION TO BE

MADE BY

PARAMETERS FOR

DECISION

1. Prospective internal user

identified

Agreement between Corporate Asset Management Working Group, Service Head, Local Ward Members and Portfolio Member

Corporate Asset Management Working Group.

Internal user accepted or land declared surplus

2. Prospective internal user

identified

Disagreement by any of the parties above

CMT/Executive

3. No internal user-declared

surplus and dispose

Agreement between Corporate Asset Management Working Group, relevant Service Head, Local Ward Members and Portfolio Member.

Corporate Asset Management Working Group following consultation with Executive Member for Corporate Governance

4. No internal user- declared

surplus and dispose

Disagreement by any of the parties above

CMT/Executive

5. Any disposal with

estimated value in excess of £500,000.00

Executive

6. Cases where in the

judgement of the Corporate Management Team, there are high levels of local controversy or particular sensitivity

Corporate Asset Management Working Group to report accordingly to Corporate Management Team

Executive

7. Disposal of legal interest

at less than best consideration.

If a Lease of up to 25 years in support of a Council Strategy or Community Asset Transfer Strategy, where principle of Transfer accepted by Council, decision delegated to Chief Legal Officer.

Chief Legal Officer (The consent of the Welsh Government may also be required in certain circumstances)

8. If disposal at Less than Best consideration is a grant of Lease in excess of 25 years or sale of the Freehold

Executive (The consent of the Welsh Government may also be required in certain circumstances)

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3.11 TheChiefLegalOfficerfollowingadvicefromthePrincipalEstatesOfficerwilldecideinaccordance with Section 123 requirements whether disposal will take place either by way of private treaty, tender or auction.

3.12 On agreement of a successful disposal, a report will be submitted to the Chief Legal

OfficerorExecutiveifappropriateforapprovaloftheagreedtermsunderhisdelegatedpowers.

3.13 On approval, the Legal Division will be instructed by the Estates Section to proceed with the disposal.

3.14 OnreceiptofaCompletionNoticefromtheChiefLegalOfficerthesalewillberecordedon the Council’s Terrier and Asset Register.

4.0 DISPOSAL OF ASSETS

4.1 Disposal of the Council’s assets should follow the guidelines and procedure set out below.

4.2 Where a property has potential for development or a change of use, which could be expected to increase the realisation price, planning permission where appropriate will be sought to gain the most advantageous use before the property is marketed. In respect of strategic sites an appropriate Development Brief should be prepared. However it should be recognised that there are circumstances where it is expedient and more cost effective to market properties without obtaining planning consent i.e. sales by public auction where Overage Clauses will be included to protect the Council’s position should an enhanced value be achieved by the purchaser

4.3 If appropriate, consideration should be given to acquiring adjoining land if it enhances the value of the Council’s land. Each case to be considered on its merit.

4.4 Subject to the exceptions at 2.2, Marketing of the property to be disposed of shall take place in each and every case. Should the Council receive a written declaration of interest in a property which has not been subject to a marketing campaign, such a campaign must be instigated before any further negotiations can take place with the interested party.

Exceptions will be:

(a) Small areas of land where only one prospective purchaser in the market could make purposeful use of the land in question (i.e. a parcel of land adjoining a prospective purchaser’s own property) where an application process will apply.

(b) Smallareasoflandwherethecostofmarketingoutweighsthefinancialbenefitreceipt which will be generated where an application process will apply.

(c) For grazing land, the current policy will apply, whereby an application process applies. The Council will consider the sale of areas of grazing land which are considered unsuitable for development or environmental purposes.

(d) Industrial Development Land where an application process will apply so as to determine the most appropriate use to promote the Economic Regeneration of the County Borough in accordance with the Unitary Development Plan, Economic Development Strategy and Local Development Plan.

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(e) Land acquired for the former National Garden Festival where the former Welsh

Development Agency part funded the scheme and is entitled to a share of any capital receipt.

(f) Requests to vary or release Restrictive Covenants imposed when the Council previously sold land, where an application process will apply.

(g) Land forming a Ransom Strip where an application process will apply.

(h) When an Adverse Possession claim has been made against the Council to acquire the land.

(i) Whereaspecialpurchaser (asdefined in thePracticeStatementof theRoyalInstitution of Chartered Surveyors Appraisal and Valuation Manual 7th Edition or subsequent editions) exists where an application process will apply.

(j) The Corus Site, where a Joint Venture Agreement with the former Welsh Development Agency for the development of the site exists.

(k) Any partnership schemes involving the Council’s land e.g. Jessica, Local Asset Backed Vehicles.

(l) Sales of land to meet proven housing need and in support of successful Social Housing Grant applications.

(m) Any land which was transferred to Tai Calon as part of the Housing Stock Transfer process which was being transferred back to the Council pursuant to the Transfer Agreement.

Where an application process applies, applicants will be required to make an appropriate written application on the prescribed form (Appendix 1), which must be submitted with the requisite non-refundable application fee, which is initially set at £50.00 (inclusive of VAT) per application per parcel of land. This fee to be reviewed annually. However, should the transaction proceed to completion, this fee will be deducted from the Surveyor’s fees due to the Council.

All disposalswill be arranged andmanaged by theChief LegalOfficer. Themethod of disposal and marketing adopted will be dependent on the individual characteristicsofeachcaseandthebenefitstobeaccruedfromthedisposal.

4.5 The method of disposal shall either be by sealed tender, public auction or private treaty depending on the type of property, its condition, its value and the prevailing conditions in themarket.ThisdecisionwillbetakenbytheChiefLegalOfficer.

4.6 AllpropertieswillbesoldonthebasisofMarketValueasdefinedinPracticeStatement3.2 of the Royal Institution of Chartered Surveyors Appraisal and Valuation Manual (7th Edition or subsequent revisions.)

4.7 A person who has previously purchased a single private residential self-build plot from

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the Council shall be excluded from purchasing a further such plot. (Unless during a marketing campaign no other interest is shown).

This exclusion shall not apply to commercial property developers who are seeking to develop more than one plot for sale, or where an individual plot is offered for sale by public auction where such an exception is not enforceable.

4.8 Where in pursuance of this policy either sealed offers or tenders are invited, every invitation shall be based on a standard form setting out the terms and conditions upon which all bids should be made, and

(a) every invitation shall state that no tender or offer will be considered unless it is enclosed in a special pre-addressed envelope which shall bear the words “Tender for” or “Offer for” followed by the subject to which it relates but no other name or mark indicating the sender; The Council will be under no obligation to accept the highest or any offer.

(b) such envelope shall be posted or delivered by hand to the Council’s Chief Legal Officersoastobereceivednotlaterthantheprescribeddateandtime;

(c) upon submitting a tender, a tenderer will submit with the tender a deposit representing 10% or £2,000.00 of the tender sum whichever is greater. Any tender will not be regarded as valid until cleared funds are received by the Council. Should the successful tenderer withdraw, his deposit will not be returned. All unsuccessful tenderers will have their deposits returned;

(d) tenders and sealed offers shall be opened at one time and only in the presence oftherespectiverepresentativesoftheChiefLegalOfficer,theCouncil’sInternalAuditSectionandPrincipalEstatesOfficer.

4.9 Where the principle of a sale is agreed in respect of properties categorised in 4.4 (a), (b), (c), (d), (e), (f), (g), (h) (i), (k), (l) and (m) above, the sale shall proceed by Private Treaty and negotiations will be entered into with the applicant and his/her agent utilising the services of the Council’s own in-house valuers.

Where the principle of a sale is agreed in respect of properties categorised in 4.4 (j) above, it should be dealt with in accordance with the Framework Joint Venture Agreement in place at that time.

There may be circumstances where it will be appropriate to instruct the District Valuer or other agents to negotiate on behalf of the Council, especially where there could be perceivedconflictsof interestorbiasandthatdecisionshallbedelegatedtotheChiefLegalOfficer.

4.10 InaccordancewiththeConstitutionoftheCouncil,theChiefLegalOfficerhasdelegatedpowers to approve the principle of any sales and the Terms of the Transaction and a report prepared by Estates Section on the tender or sealed offers received shall be presented to him with an appropriate recommendation for approval.

4.11 Following approval by the Chief Legal Officer to the terms of any sale, the PrincipalEstatesOfficershallinstructtheLegalDivisiontoprogressalllegalworktoensurethesale is completed as expeditiously as possible.

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4.12 Where it is deemed necessary a Restrictive Covenant or claw-back provision will be inserted within any Transfer to protect the Council’s position against a purchaser later obtainingawindfallgain ifplanningconsentwere tobeobtainedforamoreprofitableplanning use.

4.13 MembersandOfficers(otherthanEstates,LegalSectionstaffandOfficersdealingwiththe letting of the Council’s Industrial Estate Portfolio) should not engage in negotiations under any circumstances or carry out any actions that may directly or indirectly seek to influenceanemployee in theconductofanypropertybased transaction involving theCouncil.AnysuchactionbeingabreachoftheMembersorOfficersCodeofConduct.

4.14 Where a transaction with either aMember or Officer proceeds by Private Treaty theDistrict Valuer shall be instructed to carry out negotiations, as prescribed in 4.9 above.

4.15 All capital receipts, net of all allowable disposal costs will initially be retained centrally for subsequent prioritised allocation in accordance with the approved Capital Programme and existing Council Policy.

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FLOWCHART OF DISPOSAL PROCESS

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5.0 MONITORING OF DISPOSAL OF SURPLUS ASSETS 5.1 Monitoring of the sale of assets deemed surplus to the Council’s requirements shall follow

the guidelines and procedure set out below.

5.2 A Surplus Asset Monitoring Report will be prepared to provide internal information to Chief Executive, Leader and Deputy Leader and other Service Managers on the sites which may be sold to realise capital receipts for the Council.

5.3 The Monitoring Report will be prepared monthly by the Estates Section and will be presented to Corporate Management Team, and Executive Member, Corporate Governance.

5.4 The Monitoring Report will comprise the following:

5.5 (1) An Executive Summary which will provide:-

• AnoverviewofprogresswithregardtotheCouncil’skeydisposalsinnarrativeform.

• Anassessmentoftheriskofdelayand/orfailure.

• Atableidentifyingthepotentialvalueandestimatedtimescaleforreceipt.

• Detailsofdisposalsinpreviousyears.

(2) Appraisal of key disposals:-

• Identificationofproperty.• Likelyreceipt• Amountreceivedtodate• Notesonissues.

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OFFICE USE ONLY

Date Received …………………………………………………………………

Fee Received…………………………………………………………………….

Officer Issued to ……………………………………………………………….

Principal Estates Officer’s Comments ………………………………..

………………………………………………………………………………..

Deed No. ………… ……………………Asset No. ……………………………

LAND /PROPERTY APPLICATION FORM

NAME

ADDRESS

Tel No:-

APPLICATION TO RENT/ PURCHASE/ LEASE LAND (please delete as appropriate) LOCATION

PROPOSED USE OF LAND

Please ensure the following are attached to this form:-

• ASketch/OrdnanceSurveyplanindicatingedgedredtheapproximatedimensionsof the area you are interested in acquiring.

• Thefeeof£50.00(incv.a.t.)perapplicationperparceloflandisnon-refundable.

• PleasereturntoBlaenauGwentCountyBoroughCouncil,EstatesSection,MunicipalOffices,CivicCentre,EbbwVale,BlaenauGwentNP236XB

APPENDIX 1

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Should your application be successful you will also be expected to meet thefollowing costs:

1. Council’s Surveyors fees for dealing with your application.

2. Council’s Solicitors fees for dealing with the Conveyance/Transfer of the property to you.

3. Change of Use – Planning Fee approximately £330.00.

4. Meet any other external costs e.g. Council’s external valuers fees

5. Meet your own Solicitors costs

6.Authority Employee/Member

With respect to the Authority, I am

(a) a member of staff Do any of these(b) an elected member statements apply to you?(c) related to a member of staff(d) related to an elected member

Yes No

If Yes, please provide details of the name, relationship and role

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6.0 ACQUISITION OF LAND AND PROPERTY

6.1 INTRODUCTION

6.1.1 This procedure sets out the framework to be adopted in relation to the acquisition of land and property.

6.1.2 Any Service requirement for property should form part of the overall strategic plan for the Council’s asset needs. It should be based on sound options appraisal andabusinesscase in linewithpriorities identifiedwithin therelevantservicedelivery plan and Corporate Asset Management Plan.

6.2 APPLICATION

6.2.1 This procedure refers to any Council requirement for property including internal reorganisations and allocation of office space in corporate buildings. It alsoincludes any property constructed on land and land itself. The term acquisition refers to any relevant interest including freehold, leasehold, tenancies, options etc.

6.3 STRATEGIC OUTLINE BUSINESS CASE

6.3.1 ApropertyrequirementmaybeidentifiedbytheServiceaspartoftheirbusinessplanning, or following an asset management review.

6.3.2 A strategic outline business case justifying the need for the acquisition must be prepared by the project sponsor and submitted to the Asset Management Section. Thiswillsetouttherationale,background,policycontextandstrategicfitoftherequirement. The strategic case should clearly state the objectives that are to be delivered and identify SMART outcomes. The level of detail required will be reflectedbythevalueofthepotentialacquisition.

6.3.3 Unless there are exceptional circumstances the Council will only acquire land or property for the following reasons:

(a) It contributes towards the functional provision of the Council’s services.

• Enablesdeliveryofcorporateandstrategicpriorities.

• Identifiedasapriorityneedwithintherelevantservicedeliveryplan and Corporate Asset Management Plan.

(b) Ownership required for strategic planning, regeneration or redevelopment purposes.

6.3.4 The relevant Executive Member must support the strategic case. Approval in principle will be required from the Corporate Asset Management Working Group (CAMWG) to progress further. If the requirement is urgent then Corporate Management Team may approve the project in principle without reference to CAMWG (although the preferred option will still be subject to CAMWG approval at a later stage).

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6.4 PROPERTY SEARCH

6.4.1 Asset Management will undertake investigations as to whether suitable land or property is already held by the Council, and if applicable initiate a property search in consultation with Estates to establish whether any suitable property exists in private sector ownership.

6.4.2 Aninitial listofoptionswillbeidentifiedinconsultationwiththeService.Thismay include either internal options or properties in third party ownership, or a combination of both:

• ReasonableandtransparentlistofoptionsincludingDoNothing/DoMinimumoption

• BasicSWOTanalysistobeundertakenoflonglisttonarrowdowntoshortlist taking into account indicative cost, location, condition, availability, tenure, risk etc.

• Justificationforrulingoutpromisingoptions.

• Recommendedwayforwardandshortlisttobeagreed.

6.5 FINANCIAL APPRAISAL

6.5.1 Afinancialappraisalwillbeappliedtoeachoptionontheshortlisttoestablishthebudgetary implications in terms of initial capital costs and future revenue costs based on a whole life costing approach. Capital and revenue costs should be based on survey results where possible e.g. valuation, condition, DDA compliance, asbestos etc. if surveys are not carried out it should be clearly stated within the appraisal that the costs are estimates.

6.5.2 Technical Services and Estates are responsible for the provision of professional advice to the Council on valuation and property matters, including negotiation of terms,conditionsurveys,asbestosadviceetc.MembersandOfficers(otherthanEstates and Technical Services staff) should not engage in these activities under any circumstances or carry out any actions that may directly or indirectly seek to influenceanemployeeintheconductofanypropertybasedtransactioninvolvingtheCouncil.AnysuchactionbeingabreachoftheMembersorOfficersCodeofConduct.

6.5.3Thefollowingcostsshouldbetakenintoaccountwithinthefinancialappraisal:

• Anycapitalcostsofacquisition.

• Anyrevenue,orpotentialrevenuetobegeneratedfromtheproperty.

• Costsofholdingproperty(capitalandrevenue).

o Immediate refurbishment o Ongoing maintenance/life cycle costs. o If leasehold – any reinstatement costs on expiry/break/surrender.

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o Rates. o Insurance o Energy o Operating costs o ICT costs o Costs of equipment, furniture and moving.

• Costsassociatedwith releasingexistingpropertyasa resultofacquiringnew property:

o Dilapidations o Disposal costs (demolition, removal of asbestos etc) o Refurbishment/adaptation works for alternative Council user if

applicable.

• Availability of all funding sources – clearly stating the preferred fundingoptionandthatsufficientcapitalrevenuefundsareavailable(ifgrantfundingset out anticipated funding).

6.6 APPROVALS

6.6.1 OncethefinancialappraisalhasbeenpreparedajointreportwillbesubmittedtoCAMWG for approval of the preferred option and identified budget. Localmembers will be consulted at this stage.

6.6.2 Approval for the acquisition shall be sought from either the Executive of the CouncilorChiefLegalOfficerinaccordancewiththeCouncil’sConstitution.

6.6.3 Priortofinalisingtermsanynecessarysurveyswhichwerenotcarriedoutattheappraisal stage should be undertaken. If such surveys identify capital or revenue costs in excess of the estimates in the original appraisal a further report should be taken back to CAMWG for approval before proceeding with acquisition.

6.6.4 Where the principle of a third party acquisition is agreed, negotiations shall be entered into with the owner and his/her agent using the services of the Council’s own in house valuers.

6.6.5 There may be circumstances where it will be appropriate to instruct the District Valuer or other agents to negotiate on behalf of the Council, especially where therecouldbeperceivedconflictsof interestorbiasandthatdecisionshallbedelegatedtotheChiefLegalOfficer.

6.6.6 InaccordancewiththeConstitutionoftheCouncil, theChiefLegalOfficerhasdelegated powers to approve the principle of any acquisition and the terms of the transaction and a report prepared by the Estates Section shall be presented to him with an appropriate recommendation for approval.

6.6.7 FollowingapprovalbytheChiefLegalOfficertothetermsofanysale,thePrincipalEstatesOfficershallinstructtheLegalDivisiontoprogressalllegalworktoensurethe acquisition is completed as expeditiously as possible.

6.6.8 OnreceiptofaCompletionNoticefromtheChiefLegalOfficerthesalewillberecorded on the Council’s Terrier and Asset Register.

Contacts

The Estates SectionCivic Centre

Tel: 01495 355032xxxxxxx@xxxxxxxxxxxxx.xxx.uk

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