North Yorkshire Council
EXECUTIVE
16 December 2025
VARIATION OF RESTRICTIVE COVENANT – LAND IN SHERBURN IN ELMET
Report of the Corporate Director – Resources
Appendix A to this report contains exempt information as defined in paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 as amended by the Local Government (Access to Information)(Variation) Order 2006
1.0 PURPOSE OF REPORT
1.1 To approve the variation of a restrictive covenant and overage provision which was applied to the land when it was sold by the Council.
2.0 BACKGROUND
2.1 The Council previously owned the land subject to this decision as part of its County Farm Estate. The land extends to approximately 12.43 hectares (30.71 acres) and is shown for indicative purposes only highlighted in blue on the attached plan ref: 9742.
2.2 The Policy at the time was for the Council to dispose of its farms and land as they became vacant and as such, this land was sold to the current owner in 2008.
2.3 As part of the sale, the Council applied restrictive covenants and an overage provision to preserve an interest in the land in the event that development potential was realised in the future. The relevant clauses from the transfer are detailed below:
2.4 These restrictions mean that an additional capital receipt will be due to the Council should the land be used for non-agricultural development.
2.5 The land as shown on the attached plan has been allocated for residential development in the previously Selby District Council Local Plan under the reference SHER-H.
2.6 Various phases of this allocation have already been progressed by the landowner (on land that the Council has never had a legal interest in), and the land subject to this decision forms phase five. The landowner is interested in advancing phase five of the development, subject to agreeing terms for the variation of the covenant with the Council.
2.7 The development of this land may give rise to a requirement to acquire additional land to support Athelstan School. CYPS are engaged in this process and will consider acquiring the additional land subject to further investigation and member approval. This acquisition will be considered on its own merits and will be subject to a separate formal decision in due course.
3.0 DETAILED PRESENTATION OF THE SUBSTANTIVE ISSUE
3.1 The land is not within the ownership of the Council and the interest that the Council has is a residual interest that may generate a capital receipt for NYC.
3.2 The council cannot refuse to vary the covenant, it is worded in such a way that NYC will agree to vary the covenant providing terms can be agreed and the necessary payment is made.
3.3 The mechanism governing the variation of the covenant is set out in a formula in the transfer document so this basis is set.
4.0 CONTRIBUTION TO COUNCIL PRIORITIES
4.1 A capital receipt will be generated by the variation which will provide funds for the re-investment into the Council’s Capital Plan.
5.0 ALTERNATIVE OPTIONS CONSIDERED
5.1 No other options are currently available in relation to this property as NYC is not the property owner and the interest the Council has in the site is limited.
6.0 FINANCIAL IMPLICATIONS
6.1 A summary of the financial matters is included at Appendix 1.
7.1 This transaction must comply with the Local Government Act 1972 and specifically section 123(2) which mandates that a council must not dispose of land or an interest in land for a consideration less than the best that can be reasonably obtained, except with the consent of the Secretary of State.
7.2 The process undertaken to dispose of this property satisfies that it will be disposed at best consideration in accordance with S123 of the Local Government Act 1972.
7.3 The Subsidy Control Act 2022 is not relevant to this transaction.
7.4 The Executive are being presented with this decision as the likely capital receipt generated will be in excess of £1.5m and therefore falls within the authority of the Executive under the Property Procedure Rules. No other consents are required for this transaction.
8.0 EQUALITIES IMPLICATIONS
8.1 The Equalities Impact Assessment has been completed, and no issues have been identified.
9.0 CLIMATE CHANGE IMPLICATIONS
9.1 The matters subject to this decision, being a variation of a restrictive covenant and overage provision, does not give rise to Climate Change implications.
9.2 The re-development of the site by any private developer may give rise to climate change implications, however, this will be assessed through the Planning process and addressed in accordance with the Planning policy that is in place.
10.0 REASONS FOR RECOMMENDATIONS
10.1 This variation will generate a capital receipt for the Council which will enable re-investment into other key areas of the council’s priorities via the Capital Programme.
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11.0 |
RECOMMENDATION |
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i) That the variation of restrictive covenant proceeds on terms to be agreed by the Corporate Director (Resources) in consultation with the Executive Member for Finance and Resources. |
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Gary Fielding
Corporate Director – Resources
County Hall
Northallerton
16th December 2025
Report Author – Philip Cowan, Estates Manager Commercial & Major Projects
Presenter of Report – Philip Cowan, Estates Manager Commercial & Major Projects
Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.