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Contents
Appendix
A
1.0
Introduction
2.0
1.0
2.1
2.2
2.3
2.4
2.5
1.1
The purpose of the Councils Acquisition and Disposal policy is to set out the
principles and rules by which the Council will acquire and disposal of land to inform
Officers, Members and also other interested parties.
2.6
2.7
2.8
3.0
Introduction
1.2
The Councils Scheme of Delegation for Land and Property sets out the
financial levels for delegation in the decision making process.
1.3
This policy together with the Scheme of Delegation are key documents in the
overall management of the Councils land and property portfolio.
1.4
To be read in conjunction with the Scheme of Delegation to Officers and
Members, Financial Rules, Anti money laundering policy, Procurement Rules and
Strategy, the Capital Strategy and the Asset Management Plan including property
key considerations and property appraisal framework.
1.5
Any Service Manager considering or identifying the need to acquire or
disposal of land or property for service delivery purposes must consult the Property
Services Manager at the earliest opportunity and prior to any commitment being
made on behalf of the Council.
1.6
This policy deals with acquisition and disposal in line with scheme of
delegation. Any acquisitions or disposals proposed which fall outside this
policy would need to be reported on an individual basis to Cabinet or Council
for approval, dependant on the values involved.
2.0
APPENDIX B4
2.1
2.1.1
The Council can choose to acquire property in any of the following forms:
2.1.2
Freehold
Leasehold (more than 7 years)
Short tenancy (less than 7 years)
The reasons for the Council to acquire land or property would be:
Service delivery
Investment
2.1.3 Prior to the purchase of any site a full option appraisal, including whole life
costing, should be carried out which would involve appraisal of all the options for
delivery of the final objective. Consideration should be given to all other Council
owned property and its suitability prior to any acquisition.
2.1.4 All option appraisals should take into account the on-going cost of ownership
of the property over its life time and ensure that any decision to acquire land is
informed by both the capital and revenue implications of ownership and the risks
associated.
2.1.5 VAT implications must be considered as part of the appraisal process prior to
any decisions being made. Financial Services to be consulted with regard to VAT
implications.
2.3.1 Land or property may be acquired for the purpose of service delivery in line
with the scheme of delegation, subject to the following criteria:
i.
2.1.6 If the Chief Executive seeks to exercise his/ her emergency powers under
Council Procedure Rule 38 for the acquisition or disposal of property, the decision
must only be taken following consultation with the Asset Management Group.
ii.
2.2
iii.
iv.
Compulsory purchase
2.2.1 The Council may consider, where appropriate the acquisition of land through
its compulsory purchase powers.
APPENDIX B4
Capital Appraisal Scheme and a capital budget approved by the Cabinet
or Council in accordance with the Financial Rules.
v.
vi.
2.4
2.4.1 Land or property may be acquired for the purpose of investment in line with
the scheme of delegation, subject to the following criteria:
Net return of 6% plus
ii.
iii.
iv.
v.
Single let or multi let, but preference away from management intensive
properties.
vi.
vii.
ix.
VAT has been considered and the Financial Services have been consulted
on the implications on VAT and that these are included in the option
appraisal.
i.
viii.
VAT has been considered and the Financial Services have been consulted
on the implications on VAT and that these are included in the Capital
Appraisal Scheme and report for decision.
2.5
Acquisition of land for strategic acquisition for future development in
line with Council priorities and objectives.
Land or property may be acquired for the purpose of future strategic development in
line with Council priorities and objectives and in line with the scheme of delegation
and subject to the following criteria:
i.
An option appraisal has been carried and reported to the Asset Management
Group, the result of which identifies the land as suitable for current or
future strategic development in line with Council priorities and objectives.
ii.
The on-going revenue costs are identified as part of the review and contained
within an approved budget which has been confirmed as appropriate by the
Financial Services Manager, and/ or an appropriate budget is approved by
Cabinet.
iii.
iv.
VAT has been considered and the Financial Services have been consulted on
the implications on VAT and that these are included in the option appraisal.
2.6
2.6.1 The Council needs to take a strategic approach to land and property
acquisitions. The requirement to invest in land and property for any of the purposes
APPENDIX B4
identified in 2.3 to 2.5 should be identified as part of the Councils procedures for
developing its Medium Term Financial Plan, Capital Programme, Corporate Plan and
Service Delivery Plans.
2.6.2 Service Managers will be required to take a medium to long term view when
planning delivery of their services and will need to identify any requirement to
acquire land and property or any opportunities to dispose of surplus assets in order
that these changes can be incorporated in the Councils financial planning systems.
2.7
Money Laundering
All transactions should be carried out in accordance with the Councils AntiMoney Laundering Policy.
All cash transactions must be within the limits set out in the Anti-Money
Laundering Policy.
Legal Services must make checks for all purchasers and ensure that vendors
solicitors, and any solicitors employed to act on behalf of the Council, have an upto
date Anti-Money Laundering Policy and that they are registered with the Law
Society.
2.8
APPENDIX B4
3.0
3.1
3.1.1 Disposal under the Local Government Act 1972 deals with all types of
disposal, freehold, leasehold and short tenancy agreements.
3.1.2 The disposal of the Councils land and property could therefore be progressed
in a number of ways and does not necessarily have to result in a freehold sale. The
following options are available:
i.
ii.
iii.
3.2
iv.
Non permanent grant of rights over land i.e. access licence, way leave
etc.
v.
Short tenancy tenancy for a term of less than 7 years or the assignment
of a term which at the date of the assignment has not more than 7 years
to run. All short tenancy disposals will be agreed outside the Landlord
and Tenant Act 1954 to exclude business protection.
3.2.1 Except where certain criteria applies, open market disposal will be the
preferred method of disposal.
3.2.2
i.
ii.
iii.
3.2.3 The method for the disposal of assets will be assessed and determined on a
case-by-case basis by reviewing all of the options and completing an option
appraisal.
3.2.4 All issues relating to the land or property, including social, environmental
and economic benefit and legal issues and agreements, will need to be taken into
account when determining the method of disposal.
3.2.5 The authority for determining the method of disposal will align with the
delegated authority for the disposal.
3.2.6 Property Services Manager, Estates Officers and Strategic Development
Officer will seek advice from Legal Services and external surveyors and valuers,
where necessary, on the type and method of disposal.
3.2.7 In principle the Council will choose the method of disposal which provides
best consideration, this may be more than just financial consideration and can
include social, environmental and economic considerations, and will be the method
which best secures the desired objectives/ outcomes for the land and/ or property.
3.3
3.3.1
The decision to dispose will be taken in line with the scheme of delegation.
3.3.2 For freehold disposal and leasehold interests over 7 years the properties will
be advertised, bids invited in the form of sealed bids by an agreed date or through
open auction.
3.3.3 Whenever possible the Council will advertise for the disposal. This will be by
way of an advert placed in an appropriate media and on the Councils website.
Where appropriate recommendations will be sought on appropriate terms, including
APPENDIX B4
rent, from an independent agents/ Valuer and where necessary will be appointed to
make recommendations on which they consider to be the best consideration taking
into account both financial and non-financial benefits.
i.
ii.
iii.
To enable a third party to relocate within the area, from a site that is
inappropriate, usually in Land Use terms, e.g. a light industrial unit
adjacent to residential properties, to a site that is more suitable, e.g. an
industrial estate or out of town location.
iv.
3.3.5 For short tenancies of less than 7 years where appropriate independent
agents/ valuers will be appointed to recommend appropriate terms including rent.
The property will be advertised by the Council directly via its website, or when
appropriate by an independent agent. The Council will enter into a tenancy with the
first tenant which is willing to agree terms and has an acceptable covenant strength
and/ or rent deposit acceptable to the Council.
3.3.6 All proposed tenants to be subject to a financial health check carried out by
Financial Services and Audit teams.
3.4
v.
vi.
3.4.4 In all circumstances a private treaty disposal would seek to produce financial
and/ or non-financial benefits, such as increased capital receipt through marriage
value of an adjoining site, social, economic or environmental benefits, which would
be at least equivalent to those obtainable through an open market disposal, in the
opinion of an independent valuer/ agent.
3.4.5 Any decision to pursue a private treaty disposal is entirely at the discretion
of Cotswold District Council and is the exception rather than the general rule. The
satisfaction of one or more of the criteria for justifying a private treaty sale does not
guarantee that the Council will choose to dispose via a private treaty disposal if
other options are available.
3.5
Joint development
APPENDIX B4
3.5.1 Where a redevelopment proposal includes Council land or property and
adjoining land, the Council may choose to pursue a joint development with the
adjoining landowner and/ or Developer or Registered Social Landlord (RSLs).
3.5.2 The details of a joint development arrangement are likely to differ from
scheme to scheme but will broadly involve sharing the cost, risk and return from the
project.
3.5.3 The benefits and risks of pursuing this method of disposal would require
detailed assessment as part of the appraisal for the development. This is likely to be
a viable option for large redevelopment projects only.
3.5.4 This form of development may result in EU procurement legislation becoming
applicable. Any joint development proposal should be discussed with Legal Services
regarding EU legislation.
3.5.5
3.6
3.6.1 Although not required within the Local Government Act 1972 best
consideration should be obtained for all short tenancy agreements unless less than
best consideration can be justified by way of social, economic or environmental
benefits.
3.6.2 All short tenancy disposals will be agreed outside the Landlord and Tenant
Act 1954 to exclude business protection.
3.6.3 Where appropriate an Independent Agent/ Valuer to be appointed to
recommend appropriate terms, including rent.
3.6.4 Property to be advertised in accordance with section 2.3 on Open Market
Disposal unless criteria for a private treaty disposal can be justified and is deemed
to be the most viable option.
3.7
3.7.1 The Council should seek, for all disposals, to achieve the best financial
consideration available for the type of property and the agreed terms.
3.7.2 However where appropriate the Council can consider non-financial benefits
as part of the consideration for a disposal.
3.7.3 The Council has the power within the Local Government Act 1972: General
Disposal Consent (England) 2003, which considers the sale of land for less than
best consideration to dispose of any asset at less than best consideration, without
the requirement for approval from the Secretary of State, at up to 2million below
open market value if it can justify the undervalue by the virtue of other benefits
either social, environmental or economic. See Appendix relating to statute law.
3.7.4 Valuations for the land or property should be carried out by an independent
valuer appointed by the Council and the valuation must be carried out in
accordance with the Local Government Act 1972: General Disposal Consent
(England) 2003. This requires valuations of the restricted sale value (allowing for
all the conditions which the Council has placed on the sale and including nonfinancial benefits) and an unrestricted sale value.
3.8
A number of the Councils assets are categorised as surplus assets for disposal or
development. Each of these sites needs to be classified as either a disposal or as
having potential for future redevelopment. In the first instance this will be carried
out by the Property Services Manager in consultation with the Community, Health
and Housing Manager and the Portfolio Holders for Corporate Resources and
Corporate Planning. This will be followed in due course by confirmation or recategorisation following a property review and option appraisal of the land or
property. If in the first instance it is unclear as to whether future development may
be viable then for disposal purposes it should be assumed that development may be
viable.
APPENDIX B4
3.9
3.9.1 A site may become suitable for redevelopment due to one or more of the
following criteria:
i.
ii.
iii.
iv.
v.
3.9.2 The Council will need to determine following a property review and option
appraisal whether the Council will redevelop the site for investment purposes or
community benefit, or whether the site will be disposal of with development
potential. The review should consider the costs and benefits of disposal of the site
with appropriate planning consent for redevelopment.
3.10
3.10.1 Prior to disposal for redevelopment purposes any short term intermediate
use shall be by way of a short tenancy with a term of less than 7 years, with a
landlord break clauses at no more than 6 months notice. This will ensure that
redevelopment can be progressed when viable.
3.10.2 All disposals should be outside the Landlord & Tenant Act 1954 to exclude
business protection.
3.10.3 Any disposal of freehold interest or leasehold interest of more than 7 years
would require Cabinet/ Council decision, dependant on values involved.
3.11
A site will be determined as surplus for disposal following a property review and
option appraisal if it meets all of the following criteria:
i.
ii.
iii.
iv.
v.
3.12
3.12.1 The Council should plan to dispose of all surplus land or property identified
for disposal within its portfolio subject to the following criteria:
i.
ii.
iii.
iv.
v.
That the disposal does not have a negative impact on the MTFP.
Terms to be approved by an independent Valuer where appropriate.
Best financial consideration to be obtained unless social,
environmental or economic benefits are provided.
The method of disposal will be determined on a case by case basis.
Any leasehold disposal transfers all liabilities to the tenant.
3.12.2 Prior to final disposal any short term intermediate use shall be by way of a
short tenancy with a term of less than 7 years, with a landlord break clause at no
more than 6 months notice. This will ensure that disposal can be progressed when
viable.
APPENDIX B4
3.13 Financial criteria for disposals
3.13.1 An option appraisal should be carried out which assesses the capital and
revenue implications of each option, includes the impact of the current economic
conditions (e.g. should we hold the asset until market conditions improve?) and the
VAT implications.
3.15
3.16
i.
Unrestricted value
ii.
iii.
Money Laundering
All transactions should be carried out in accordance with the Councils AntiMoney Laundering Policy.
All cash transactions must be within the limits set out in the Anti-Money
Laundering Policy.
3.14
Legal Services must make checks for all purchasers and ensure that vendors
solicitors, and any solicitors employed to act on behalf of the Council, have an upto
date Anti-Money Laundering Policy and that they are registered with the Law
Society.
3.17
APPENDIX B4
Appendix
Main Statute Law relating to Acquisitions
The Local Government Act 1972 section 120 empowers a principal council to
acquire by agreement any land inside or outside its area
(1)
(2)
A principal council may acquire by agreement any land for any purpose for
which they are authorised by this or any other enactment to acquire land.
Notwithstanding that the land is not immediately required for that purpose; and,
until it is required for the purpose for which it was acquired, any land acquired
under this subsection may be used for the purpose of any of the councils functions.
Local Government Act 2003 section 12 gives local authorities power to invest. It
provides that a local authority may invest:
(a)
(b)
circumstances. The Council can therefore sell at an under value without the
requirement for approval from the Secretary of State in line with the following
specified circumstances:
(a)
The local authority considers that the purpose for which the land is to be
disposed is likely to contribute to the achievement of any one or more of the
following objects in respect of the whole or any part of its area, or of all or any
persons resident or present in its area;
(i)
(ii)
(ii)
(b)
The difference between the unrestricted value of the land to be disposed of
and the consideration for the disposal does not exceed 2 million pounds.
See section 3.7 relating to disposal of land at less than best consideration.
123 (2A) A principal council may not dispose under subsection (1) above of any land
consisting or forming part of an open space unless before disposing of the land they
cause notice of their intention to do so, specifying the land in question to be
advertised in two consecutive weeks in a newspaper circulating in the area in which
the land is situated, and consider any objections to the proposed disposal which
may be made to them.
123 (2B) Where by virtue of subsection (2A) above a council dispose of land which is
held
(a)
for the purpose of section 164 of the Public Health Act 1875 (pleasure
grounds); or
123(2) except with the consent of the Secretary of State, a council shall not dispose
of land under this section, otherwise then by way of a short tenancy, for a
consideration less than the best that can reasonably be obtained. The Council shall
not dispose of land under this.
(b)
in accordance with section 10 of the Open Spaces Act 1906 (duty of
local authority to maintain open spaces and burial grounds.
However, The Local Government Act 1972: General Disposal Consent (England)
2003 gives consent to disposal of land otherwise than by way of a short tenancy by a
local authority in England for less than best consideration subject to specified
The land shall by virtue of the disposal be freed from any trust arising solely by
virtue of its being land held in trust for enjoyment by the public in accordance with
the said section 164 or, as the case may be, the said section 10.
APPENDIX B4
123 (7) For the purposes of this section a disposal of land is a disposal by way of a
short tenancy if it consists
(a) of the grant of a term not exceeding seven years, or
(b) of the assignment of a term which at the date of the assignment has not
more than seven years to run
and in this section public trust land has the meaning assigned to it by section 122
(6) above.