Property Procedure Rules

CONTENTS

1.0 Introduction and Key Principles

2.0 Application

3.0 General Arrangements

4.0 All Property Transactions

5.0 Property transactions – Acquisitions – additional arrangements

6.0 Property transactions – Disposals – additional arrangements

7.0 Property transactions – Mortgages – specific arrangements

8.0 Property transactions – Restrictions on title – specific arrangements

9.0 Re-allocation of a property to a new use by the Council, including appropriation

10.0 Property-related compensation payments

11.0 Signature / Sealing of Property Contracts

12.0 Investment in Property

PROPERTY PROCEDURE RULES

These Rules constitute the Council’s Standing Orders in relation to property contracts and the management of property.

1.0 INTRODUCTION AND KEY PRINCIPLES

1.1 These terms will have the following meanings in the Property Procedure Rules:-

Asset Management

System Asset Management software package that contains Property information

ACE(LDS) The Assistant Chief Executive (Legal and Democratic Services)

Acquisition The acquisition of Property by the Council by whatever means, including but not limited to:

· an option for a purchase or a lease

· a new lease for a Property previously leased in (a lease renewal), including an option to renew contained in an existing lease

· a Co-habitation Arrangement with another organisation in a non-Council Property

· the surrender or assignment of a lease to the Council, including the operation of a break clause

but excluding:

· a mortgage of Property owned by a third party in favour of the Council

· a licence with a term of no more than one year and at a fee of no more than £15,000

Co-habitation

Arrangement An arrangement with a third party to use space in a Council Property or for the Council to use space in a third party’s Property without a lease or licence or the payment of a rent or fee, but normally with payments for a share of running costs. This often relates to space shared by cross-organisation teams.

Compulsory

Purchase Order An order for the acquisition of land authorised by or under an Act to enable the acquisition of land compulsorily in order to carry out statutory functions, such as to develop land or construct road schemes

Council North Yorkshire County Council

County Farms

Portfolio The Council’s agriculture assets

CDSR The Corporate Director Strategic Resources

Director A Corporate Director of the Council including the Chief Executive

Disposal The disposal of Property by the Council by whatever means, including but not limited to:

· the surrender or assignment of a lease by the Council including the operation of a break clause

· a Co-habitation Arrangement with another organisation in a Council Property

· the grant of a licence of all or part of a Property to a third party

but excluding:

· the granting of a mortgage in respect of Property owned by the Council

· a licence with a term of no more than one year and at a fee of no more than £15,000

Heads of Terms A document which sets out the terms of a property transaction agreed in principle between the parties during the course of negotiations

Licence

from a third party An agreement for the non-exclusive use of property owned by a third party. This is usually limited by hours of operation or by sharing occupation

Licence

to a third party An agreement for use of Council owned property by a third party. This is usually limited by hours of operation or by sharing occupation

Market Rent The estimated amount for which an interest in property should be leased after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion

Market Value The estimated amount for which an asset or liability should exchange after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion

Officer A Council employee or other authorised agent

Officer of the

Property Service A Council employee within the Property Service whose role, competence or, where required, professional qualification enables them to undertake the relevant task. Here competence will be determined by the CDSR

Property Any estate or interest in land and/or buildings

Property Contract A contract relating to Property including (but not limited to) transfers, leases, options, easements, (except easements for highway drainage granted under, or as a consequence of an agreement made under Section 38 (adoption of new highways) or Section 278 (development of existing highways) of the Highways Act 1980) tenancy agreements, licences, and variations and releases from restrictive covenants, user rights granted under local government reorganisation arrangements and wayleaves, but excluding those contracts entered into by school governing bodies under their delegated powers

Property Portfolios Property assets wholly or partially owned or leased by the Council

Property Service The Council’s team of Officers who manage the Property Portfolio

Reallocation of

Property The re-allocation of a Property by the Council for a purpose different to that for which it has hitherto been used including to disposal (no longer noted in document)

Subsidy Control system for regulating public sector or economic interventions as set out in subsidy control legislation and guidance

Tenderer A person who has expressed an interest in tendering for a Property Contract or who has tendered for a Property Contract

1.2 The Property Procedure Rules (PPR) form part of the overall control framework within which North Yorkshire County Council operates. They aim to facilitate sound, innovative service delivery in the administration of all property matters throughout the Council, supporting effective property management that provides value for money and good decision-making.

1.3 The PPR should be read in conjunction with the Financial Procedure Rules and the Procurement and Contract Procedure Rules.

1.4 All decisions taken under the PPR must be in accordance with all relevant legal requirements and government guidance, including: -

(a) Acts of Parliament; and

(b) Statutory Instruments

1.5 The PPR apply to all Property that is owned or occupied by the Council, subject to the following exceptions: -

Property type

Exception

Person / Body with Responsibility

Operational Landfill Sites

Day-to-day management.

Corporate Director Business & Environmental Services

Nursery schools

Primary Schools

Secondary Schools

Special Schools

Pupil Referral Units

Day-to-day management.

Investment decisions.

Corporate Director Children & Young People’s Service

and Schools’ Governing Bodies

The Rules apply to all activities associated with the ownership and occupation, and management of Property which include, but are not limited to: -

(a) a future or current property transaction involving the Council

(b) the re-allocation of a Property to a new use by the Council

(d) investment in a Property by the Council

(e) the strategic and operational management of Property used by the Council.

1.6 Where a decision is made under these Rules in respect of investment in a Property by the Council or the management of Property used by the Council and that decision necessitates a procurement of works or services then the Procurement and Contract Procedure Rules will apply.

1.7 All Property owned or occupied by the County Council is held and managed as a corporate resource. Responsibility for its management lies with the Corporate Director Strategic Resources (CDSR), and is delivered through the Property Service in accordance with arrangements determined by the CDSR.

1.8 The CDSR is authorised to acquire, manage and dispose of all Property held by the Council in accordance with these Rules and the Council’s budgetary and policy framework.

For the avoidance of doubt this authority includes, but is not limited to: -

(a) Acquisitions and disposals, including leases and licences

(b) Renewals of leases and licences

(c) Management of all Property, including the allocation of operational space (including for both County Council and third party use) the management of associated facilities, the commissioning of all facilities services and the reallocation of Property

(d) Repair and maintenance of all Property. This includes, but is not limited to, repair and maintenance obligations relating to property ownership, contributions to maintenance and repair carried out by third parties, service charge obligations and dilapidations

(e) Investment in all Property. This includes, but is not limited to, the commissioning and delivery of construction projects and contributions to third parties.

The CDSR will exercise their delegated powers to ensure efficiency within the management of the Property Portfolio and the delivery of associated services.

1.9 The CDSR will ensure that arrangements are in place so that all decisions taken in accordance with these Rules are informed by Officers in the Property Service, or consultants commissioned by them, who are competent to do so. These decisions will take account of both future and contingent liabilities arising from the properties as such liabilities will be the responsibility of the Property Service.

1.10 Officers employed in Service Directorates or services other than the Property Service are not authorised to make the decisions referred to in these Rules except where stated explicitly.

1.11 The CDSR will maintain a forward schedule of decisions that are to be taken under these Rules.

1.12 The CDSR will also maintain a schedule of all decisions that have been taken under these Rules.

1.13 References in these Rules to:-

(a) any legislation (including but not limited to~~e.g.~~ Act of Parliament, Statutory Instrument~~, EU Directive~~) include a reference to any amendment or re-enactment of such legislation;

(b) the singular include the plural and vice versa;

(d) Reference to the CDSR and the Assistant Chief Executive (Legal and Democratic Services) (ACE(LDS)) shall be taken to include such Officers as are designated by them to undertake the duties and responsibilities set out in these Rules.

2.0 APPLICATION

2.1 The Rules apply to Property which includes, but is not limited to, Property and legal and equitable estates and interests in land.

Land is the land surface, everything below the surface, buildings and other structures on or under the surface, and such airspace as is reasonably necessary for the ordinary use of the land.

Land also includes plant, equipment and other things fixed to a building that could not be removed without damaging the fabric of the building.

2.2 Under these Rules, a Property transaction is a transaction that affects a Property, including but not limited to: -

(a) a freehold/ leasehold transfer

(b) a lease or tenancy agreement

(d) a recurring hiring in or a recurring hiring out or a one-off hiring out or a one-off hiring in

(e) an option

(f) user rights granted under local government reorganisation arrangements

(g) a co-habitation arrangement with another organisation either in or out

(h) a wayleave

(i) an easement (except as excluded by Rule 2.3)

(j) a mortgage

(k) a legal charge

(l) variations and releases from restrictive covenants

2.2

2.3 Under these Rules, a property transaction is not:

(a) an easement for highway drainage granted under or as a consequence of an agreement made under Section 38 (adoption of new highways) or Section 278 (development of existing highways) of the Highways Act 1980

(b) a contract entered into by a school governing body under its delegated powers including hirings out.

2.4 A decision about a property transaction is a decision in respect of Property, which includes, but is not limited to, a decision to:-

(a) acquire or dispose an estate or interest in property by any means

(b) acquire or dispose a licence or hiring

(d) operate / not operate a break clause in a lease or tenancy agreement

(e) implement conditional terms contained within a property contract

(f) vary or release restrictive covenants

(g) change the terms of a transaction after it has been completed

(h) implement and agree rent reviews under a lease or tenancy agreement

(i) impose or accept or remove a restriction on title

(j) provide or secure or discharge a mortgage

2.5 A property-related compensation payment is a payment made under the Land Compensation Act 1973 or other legislation covering highway schemes or other projects. It can be made either: -

(a) by the Council to another party; or

(b) to the Council by another party.

It includes payments in relation to claims known as ‘Part 1’ and ‘Section 10’.

2.6 Under these Rules an investment in a Property is considered to be one that takes the form of capital or revenue expenditure that results in one of the following:-

(a) responsive maintenance to a Property

(b) preventative maintenance to a Property

(d) a response to compliance issues at a Property

(e) the securing of an empty Property

(f) improvement of a Property (a project)

(g) addition of accommodation (a project)

(h) demolition of all or part of a building or structure.

3.0 GENERAL ARRANGEMENTS

Approvals

3.1 All decisions under these Rules will be made in accordance with the provisions outlined below and in accordance with the Access to Information Procedure Rules.

3.2 All decisions under these Rules must be made in writing and entered in the schedule of decisions (except where specified otherwise in these Rules) that will be maintained (here, ‘writing’ includes decisions recorded in the Asset Management System.)

3.3 The only exceptions to rule 3.2 are: -

(a) a decision for a one-off hiring out; or

(b) a decision to commission investment in a Property, including individual responsive maintenance projects, where the value is £50,000 or less.

These decisions can be approved under other operational delegated authorities.

3.4 A proposed decision, and its approval, must comply with the Council’s Access to Information Procedure Rules and any other relevant Constitutional provisions, including (but not limited to) the Financial Procedure Rules and the Procurement and Contract Procedure Rules.

3.5 A proposed decision and its approval must take into account, along with all relevant considerations, value for money to the Council, including in relation to any alternative options that are considered.

Compliance

3.6 All Property decisions must be taken in accordance with these Rules unless a waiver is granted under Rule 3.9.

3.7 Each Corporate Director or Assistant Chief Executive must ensure that officers within their directorate and consultants working for the Council are aware of the Rules and must take all reasonable steps to ensure that officers and consultants comply with them. Failure to comply with the Rules may lead to disciplinary action.

3.8 The CDSR must monitor adherence to these Rules.

Waivers

3.9 The CDSR in consultation with the ACE(LDS) may grant a case-specific waiver to the application of the Rules, except in relation to Rules 1.6 and 9.2. A waiver must be recorded in writing.

Review

3.10 The CDSR, in consultation with the ACE(LDS), shall periodically review the application and effect of these Rules and report to the Audit Committee on the outcome, including any proposed amendments to the Rules.

4.0 ALL PROPERTY TRANSACTIONS

Identifying Need

4.1 Officers in a directorate may identify the possible need for a Property transaction from an operational service point of view.

4.2 Any report that is required covering changes to service delivery and associated decisions that necessitate a Property transaction may be arranged by the Corporate Director who manages the affected service. Where this is the case, the CDSR will provide confirmation for the report that the proposed transaction is appropriate and required.

4.3 Officers in a directorate must not:-

(a) make contact with an owner or agent or possible tenant about a specific property;

(b) discuss or negotiate or agree any terms for a property transaction with an owner or agent or possible tenant.

4.4 Officers in the Property Service may identify the possible need for a Property transaction or identify other decisions linked to a Property transaction from a strategic or operational point of view.

4.5 The CDSR must approve any identification of need for a Property transaction, in so doing taking account of, amongst other relevant factors, likely capital and revenue cost implications and must confirm that appropriate funds are available before any action is taken by the Property Service.

Approving in principle proposals

4.6 Only Officers in the Property Service can: -

(a) submit a report with a proposed in principle decision for approval;

(b) provide the property input to a report to the Executive that covers both service and Property transaction issues and provide the wording for a resolution related to a proposed property transaction.

4.7 The value to be used to determine the approval arrangement for a proposed decision is the value as estimated by an Officer in the Property Service or by a consultant appointed to provide property advice or services, at the time that the report about the decision is prepared. It is recognised that the actual value may differ from that identified in the in principle report.

Negotiating and instructing

4.8 Only Officers in the Property Service can instruct a consultant to negotiate terms for a proposed Property transaction.

4.9 Only Officers in the Property Service or in a consultancy appointed to provide Property advice or services can:-

(d) propose terms for approval.

4.10 Rule 4.9 does not prevent an in principle decision from setting terms that are critical to that decision.

Approving terms

4.11 The CDSR can approve the proposed terms of a property transaction (Heads of Terms).

4.12 Terms must be approved only if they are in accordance with the in principle decision. If they are not in accordance then a new decision is required.

Entering into a property contract or documenting the implementation of the decision

4.13 A Property contract can be completed only if approval has been given to the transaction in accordance with these Rules.

4.14 The ACE(LDS) shall ensure that the Council has the legal power to enter into a specific Property contract and that the Council does not enter into a contract which is ultra vires.

4.15 The ACE(LDS) must prepare and complete the documentation for a Property contract in accordance with the approved terms, subject to:

(a) any variations agreed with the Corporate Director Strategic Resources

(b) any further terms as the ACE(LDS) considers are appropriate and in the best interests of the Council

4.16 A Property contract must be signed or sealed in accordance with the provisions of Section 11 of these Rules

Management of Property transactions after their completion

Approval for Rent Reviews

4.17 The CDSR may approve the completion of a rent review memorandum provided that the original lease included provisions for the rent review.

Variation of lease terms

4.18 The CDSR may approve any variation to the terms of an existing lease or other agreement (including the grant of a licence to assign or sublet) except that, if the variation would result in a decrease to the rent or licence fee, Rule 5.2 shall apply.

Assignment or Sub-Letting of a Lease In

4.19 The CDSR may approve any assignment or sub-letting associated with a lease provided that the proposal would result in the Council’s rent or licence fee being static or decreasing. In the event that the Council’s rent or licence payment were to increase then the approvals identified at Rule 5.3 will apply

Assignment or Sub-Letting of a Lease Out

4.20 The CDSR may approve any assignment or sub-letting associated with a lease provided that the proposal would result in the Council’s rent or licence fee being static or decreasing. In the event that the Council’s rent or licence payment were to increase then the approvals identified at Rule 5.3 will apply

Dilapidations Claims

4.21 The CD-SR may approve the settlement of dilapidations claims where the Council is landlord or tenant, and to any value.

Release or variations of restrictive covenants

4.22 In respect of the release or variation of restrictive covenants:-

(a) the CDSR may approve any release or variation up to £500,000 in value;

(b) the Executive Member for Finance and Assets may approve any release or variation up to £1,000,000 in value;

(c) the Executive may approve any release or variation and must approve any release or variation over £1,000,000 in value.

For the purposes of this Rule, the value is the value of the payment to effect the release or variation.

Restrictions on Title

4.23 The CDSR may instruct the ACE(LDS) to place or remove restrictions on the title of any Property owned by the Council, or to place restrictions on the title of properties owned by third parties, provided that such restrictions are to secure a grant or other loan to or from the Council.

County Farms Management

4.24 The CDSR may approve any transaction associated with the management of the County Farms Portfolio provided that the proposal is in accordance with, or not in conflict with, the County Farms Portfolio.

Other approvals

4.25 A decision that is required to change the status of land from being highway maintained at the public expense in order to allow the land to be used for another purpose by the Council or for disposal is made under separate arrangements under the Constitution. Such a decision must be taken before a decision is taken under these Rules about the future of the site.

5.0 PROPERTY TRANSACTIONS – ACQUISITIONS – ADDITIONAL ARRANGEMENTS

Approvals

5.1 In respect of the Acquisition of Property other than by lease or licence or other agreement for a rent or licence fee or other annual payment or by option:-

(a) the CDSR may approve any Acquisition up £500,000 in value;

(b) the Executive Member for Finance and Assets may approve any Acquisition up to £1,000,000 in value;

For the purposes of this Rule, the value in relation to the surrender of a lease to the Council is the capitalised value of the rent or licence fee foregone as a result of the surrender.

5.2 Subject to Rule 5.3 in respect of the Acquisition of Property by lease or licence or other agreement for a rent or licence fee or other annual payment:

(a) the CDSR may approve any Acquisition where the annual rent or fee or other annual payment is £150,000 or less;

(b) the Executive Member for Finance and Assets may approve any Acquisition where the annual rent or fee or other payment is £250,000 or less;

(c) the Executive may approve any Acquisition and must approve any Acquisition where the annual rent or fee or other annual payment is more than £250,000;

For the purpose of this Rule, the annual rent or fee or other annual payment means the initial rent or fee or other annual payment payable by the Council (but ignoring any discount or rent-free period).

5.3 In the case of the payment of a premium by the Council for a lease the approvals required shall be sought according to the value bands in Rule 5.1.

5.4 In respect of the Acquisition of Property by option:

(a) the CDSR may approve the securing of an option providing that the anticipated total cost payable to secure the option does not exceed the available budget provision

(b) the Executive may approve the securing of an option and must approve the securing of any option for which the anticipated total cost payable to secure the option exceeds the available budget provision

(d) should it become necessary to vary the terms of an existing option, approval shall be sought subject to the same value bands as set out in Rules 5.1 and 5.2

For the purpose of this Rule, the relevant value for securing options is the cost of securing the option plus the value of the resulting transaction. The relevant value for exercising options is the value of the transaction to be entered into.

Funding

5.5 No approval must be sought for the acquisition of a Property unless budget provision has been made for the cost of acquisition and any one-off or recurring expenditure as a result of the acquisition.

5.6 If a directorate is funding the cost of an acquisition that will form part of the Property Portfolio then it must transfer base budget to the Property Service budget for day-to-day running costs (for the avoidance of doubt this includes, but is not limited to, rent, service charge and insurance rent) and for repair and maintenance in the event that liability will be incurred.

5.7 The availability of the funding referred to at 5.5 and 5.6 must be confirmed by the CDSR.

Transactions at over value

5.8 A transaction may be approved at a price that is above the Market Value or at a rent that is above the Market Rent if it would be in the Council’s best overall interest and in line with the Council’s fiduciary duty to the taxpayer. The opinion as to the Market Value or Market Rent is that of an Officer of the Property Service or in a consultancy appointed to provide Property advice or services.

5.9 If the likelihood of such a transaction is known when the report for the in principle decision is being written then the report must include:

(a) A detailed justification for the transaction on this basis.

(b) An assessment of the legal implications by the ACE(LDS) associated with Subsidy Control; and

(c) A statement about how any Subsidy Control issues have or will be resolved by the directorate wishing to acquire the property.

5.10 If the best terms that can be agreed for a transaction are above the Market Value or Market Rent then before the terms are approved:

(a) The CDSR must be informed.

(b) Any Subsidy Control issues must be identified by the ACE(LDS).

Auction or tender

5.11 If the Council wishes to acquire a property that is for sale or for lease by an auction or by a formal tender exercise or an informal tender exercise then:

(a) An in principle decision must be sought as with any other acquisition.

(b) A valuation of the property must be obtained from an Officer of the Property Service or a consultancy appointed to provide property advice or services.

(d) The bid must be placed by an appropriately qualified officer in the Property Service or in a consultancy appointed to provide property advice or services.

Compulsory purchase

5.12 If a Corporate Director, in consultation with the CDSR and the ACE(LDS) considers that it is necessary to use compulsory powers to acquire property in connection with a Council function then the Corporate Director must seek:

(a) all necessary approvals in respect of the cost of the acquisition.

(b) approval from the Executive to the proposed exercise of the powers

(c) all other approvals as are necessary to enable the compulsory powers to be used, including approvals from the Secretary of State.

5.13 An approval given by the Executive to use compulsory powers is deemed to include the in principle approval to acquire the Property that is the subject of the Compulsory Purchase Order using the powers or by negotiation regardless of: -

(a) the number of sites to be acquired

(b) the value of the sites to be acquired.

Hirings in – recurring

5.14 A recurring hiring in is a sessional booking that occurs on a repeat basis.

5.15 Recurring hirings in are handled in the same way as any other acquisition transaction.

6.0 PROPERTY TRANSACTIONS – DISPOSALS – ADDITIONAL ARRANGEMENTS

General

6.1 The CDSR is authorised, in accordance with the Council’s budgetary and policy framework, to implement all processes required in accordance with good practice to ensure that all Property disposals comply with all relevant legislation, codes of practice and guidance.

6.2 The best consideration must be obtained for a disposal in order to meet the requirements of Section 123 of the Local Government Act 1972 – subject to the provisions set out in rules 6.7 to 6.10.

6.3 If a Property was purchased or improved using grant funding then the disposal and allocation of proceeds must comply with any grant conditions. Any grant conditions that conflict with these Rules take precedence. If there is a conflict then the advice of the CDSR and the ACE(LDS) must be sought before an in principle approval is given.

Approvals

6.4 Subject to Rule 6.7 in respect of the Disposal of Property other than by lease or license or other agreement for a rent or license fee or other annual payment: -

(a) the CDSR may approve any Disposal up to £1,000,000 in value;

(b) the Executive Member for Finance and Assets may approve any Disposal up to £1,500,000 in value;

(c) the CDSR my approve any Disposal of land or Property that forms part of the County Farms estate, irrespective of value

(d) the Executive may approve any Disposal and must approve any Disposal over £1,500,000 in value subject to Rule 6.4(c)

For the purpose of this Rule, the value in relation to options means the value of the transaction resulting from the option and not the value of the option itself. For the purposes of this Rule, the value in relation to the surrender of a lease by the Council is the capitalised value of the rent or licence fee which would have been paid, but for the surrender.

6.5 Subject to Rules 6.6 and 6.7 in respect of the Disposal of Property by lease or license or other agreement for a rent or license fee or other annual payment: -

(a) the CDSR my approve any Disposal where the annual rent or fee or other annual payment is £150,000 or less;

(b) the Executive Member for Finance and Assets may approve any Disposal where the annual rent or fee or other annual payment is £250,000 or less

(c) the Executive may approve any Disposal but must approve any Disposal where the annual rent or fee or other annual payment is more the £250,000

For the purpose of this Rule, the annual rent or fee or other payment means the initial rent or fee payable or other payment to the Council (but ignoring any discount or rent-free period). For the purposes of this Rule in relation to options, the annual rent or fee means the initial rent or fee payable to the Council under the lease or licence resulting from the option.

6.6 In the case of the Disposal of Property by lease where a premium is payable to the Council the approval required shall be sought pursuant to the value bands referred to in Rule 6.4.

Transactions at under value

6.7 A transaction may be approved at a price or rent that is at less than best consideration if it would be in the Council’s best overall interest and in line with the Council’s fiduciary duty to the taxpayer and providing that it is permitted under a general consent issued by central government.

6.8 A report proposing such a transaction must include:

(a) the justification for undertaking the transaction at less than best consideration

(b) the authority that is to be used

(d) a statement about how any Subsidy Control issues have or will be resolved.

6.9 In respect of Disposal of Property other than by lease or licence or other agreement for rent or licence fee or other annual payment the relevant approvals shall be sought in accordance with the following:-

Approver	Maximum market value	Maximum undervalue authority
Corporate Director Strategic Resources	£50,000	100%
Corporate Director Strategic Resources	£250,000	50%
Executive Member for Finance and Assets	£250,000	100%
Executive Member for Finance and Assets	£500,000	50%
Executive	No limit	100% except where the undervalue is £2m or more
Secretary of State	No limit	No limit

6.10 In respect of Disposal of Property by lease or licence or other agreement for rent or licence fee or other annual payment the relevant approvals shall be sought in accordance with the following:-

Approver	Maximum annual rental value	Maximum undervalue authority
Corporate Director Strategic Resources	£25,000	100%
Corporate Director Strategic Resources	£50,000	50%
Executive Member for Finance and Assets	£25,000	100%
Executive Member for Finance and Assets	£100,000	50%
Executive	No limit	100% except where the undervalue is £2m or more
Secretary of State	No limit	No limit

In respect of Disposal of Property by lease or licence involving the payment of a premium the approvals shall be sought according to the value bands in the table in Rule 6.9 above.

For the purposes of this Rule, the undervalue is the difference between the unrestricted value of the Property to be disposed of and the consideration for the disposal.

~~Academies~~ Stautory Transfers

6.11 The CDSR will approve all transfers that are required by or under statute. This includes transfers to a diocesan body under the School Standards and Framework Act 1998 or to an academy trust under the Academies Act 2010. The approval will include the extent of the transfer and can include any other terms that are critical to the decision, as for any other transaction.

~~Where a disposal arises pursuant to the Academies Act, 2010 the relevant approval for disposal shall be sought from the Executive Member for Education and Schools.~~

External consents

6.12 The Corporate Director Children and Young People’s Service, or person nominated by him, must seek any external approvals required in the relation to the disposal of school Property that falls under Section 77(1) of the School Standard and Framework Act 1998 and or Schedule 1 under the Academies Act 2010.

6.13 The CDSR must seek all other external consents that may be required for a transaction.

Hirings out – one-off and recurring

6.14 The CDSR may enter into agreements with individuals and organisations to hire out properties, or parts of properties, on both one-off and recurring bases.

Right to Buy under the Housing Act 1985

6.15 The ACE(LDS), in consultation with the CDSR, may admit or deny the application of the right to buy to a Property.

6.16 If the right to buy is admitted then the ACE(LDS) must dispose of the Property in accordance with the Housing Act 1985.

Method of disposal

6.17 All relevant factors must be taken into account in selecting the most appropriate method of disposal of a Property, including, but not limited to:-

(a) the likely value of the Property

(b) the potential market for the Property

(d) the effect of alternative planning consents upon value

(e) the costs of interim management (including security) and of disposal (including advertising and other marketing)

(f) the likely time required to reach completion.

Disposal by tender

6.18 This Rule 6.18 applies to all Disposals of Property by tender whether the tender is subject to contract or is capable of immediate acceptance.

6.19 A tender may only be considered if:-

(a) it has been received in a sealed envelope marked “Tender” and indicating the Property referred to in the tender; and

(b) the identity of the Tenderer cannot be ascertained from the tender envelope; and

(c) subject to Rule 6.20, the tender has been returned to the ACE(LDS) before the tender closing date (which shall be a time and date when County Hall is open for business).

6.20 The ACE(LDS) shall be responsible for the reception and safe custody of tenders until they are opened.

6.21 Tenders must be opened at the same time and in the presence of the ACE(LDS) who shall maintain a record of the tenders received. Such a record shall include the date and time of tender opening, the identity of the Officer present, the identities of Tenderers and the tendered amounts. A copy of such a record shall be provided as soon as practicable to the CDSR.

6.22 If a tender is received after the specified tender closing date it may not be considered unless the ACE(LDS) is satisfied that the tender was posted or otherwise dispatched in sufficient time to be delivered before the specified time but that delivery was prevented by an event beyond the control of the Tenderer and that other tenders have not been opened.

Tender Evaluation

6.23 Tenders shall be evaluated by the CDSR. The CDSR shall accept the tender which offers the best consideration for the Property in accordance with Rule 6.4 above. The CDSR shall ensure that the tender evaluation process is fair, and so far as consistent with the achievement of best consideration by the Council, that the basis on which tenders are to be evaluated has been established before tenders are opened. If all of the tenders are not submitted on the same basis (for example, if some tenders are conditional on planning permission being granted for a particular use of the Property), then the CDSR shall produce a report setting out the reasoning which has been applied to determine which tender has been judged to offer the best consideration for the Property.

Alterations to Tenders

6.24 Tenders may not be altered by Tenderers after the tender closing date except where the CDSR is satisfied that arithmetical errors having been inadvertently made by the Tenderer, the Tenderer can be invited to correct them.

Post Tender Negotiations

6.25 Post tender negotiation may be undertaken in accordance with the following conditions:-

(a) The CDSR considers that added value may be obtained;

(b) the post tender negotiations are undertaken either with all Tenderers, or with such Tenderer(s) as the CDSR considers it appropriate to invite having regard to the value of their tenders and any conditions attached to them;

(c) the post tender negotiations are conducted by suitably experienced Officers approved by the CDSR and trained in post tender negotiations;

(d) a record of the negotiations and any added value obtained from them is kept by the CDSR; and

(e) any such added value obtained by the post tender negotiations is incorporated into the Property Contract with the successful Tenderer.

6.26 The basis on which tenders are to be evaluated must be established before tenders are opened, in so far as this is consistent with the achievement of best consideration.

6.27 If all of the tenders that are received are not submitted on the same basis (for example, if some tenders are conditional on planning permission being granted for a particular use of the Property) then Officers in the Property Service must set out and then apply the approach that is used to determine which tender offers best consideration.

Surrender of a lease or a licence

6.28 The surrender of a lease in or a licence in, whether by the operation of a break clause or by negotiation, is a disposal to which the Rules in this section apply.

7.0 PROPERTY TRANSACTIONS – MORTGAGES – SPECIFIC ARRANGEMENTS

Property owned by others

7.1 The CDSR may instruct the ACE(LDS) to enter into the mortgage of a Property owned by another party, provided that the mortgage is to secure the Council’s interests linked to a grant or loan made to another party.

Property owned by the Council

7.2 The CDSR may instruct the ACE(LDS) to enter into the mortgage of a Property owned by the Council.

Terms

7.3 The CDSR must set the terms of a mortgage in consultation with the ACE(LDS).

Discharge

7.4 The CDSR may instruct the ACE(LDS) to discharge a mortgage.

8.0 PROPERTY TRANSACTIONS – RESTRICTIONS ON TITLE – SPECIFIC ARRANGEMENTS

8.1 The CDSR may instruct the ACE(LDS) to place or remove restrictions on the title of a Property owned by the Council.

8.2 The CDSR may instruct the ACE(LDS) to place or remove restrictions on the title of a Property owned by another party.

9.0 RE-ALLOCATION OF A PROPERTY TO A NEW USE BY THE COUNCIL, INCLUDING APPROPRIATION

General

9.1 This section covers all re-allocations of a Property to a new use by the Council, except for a proposed decision to:-

(a) dispose of a Property (to allocate it to the for sale Property type)

(b) grant a lease out or a licence out

The exceptions listed above are covered by Section 6.

9.2 A decision to reallocate a Property to a new use represents a decision to appropriate the Property to the new use where such a decision is required under S123 of the Local Government Act 1972 or other legislation. Any report on which a decision is based will carefully identify this.

9.3 The specific arrangements set out in S122 of the Local Government Act 1972 or other legislation that requires appropriation or sets out specific arrangements for an appropriation must be followed alongside the Rules in this section. If there is any conflict between the Rules and the legislation then the legislation takes precedence.

9.4 The CDSR will be responsible for seeking the required approval for the reallocation of Property.

Approvals

9.5 In the case of any Reallocation of Property other than for disposal which is not held by the Council on a lease or license: -

(a) the CDSR may approve any Reallocation of Property up to £1,000,000 in value;

(b) the Executive Member for Finance and Assets may approve any Reallocation of Property up to £1,500,000 in value

(c) the Executive may approve any Reallocation of Property, and must approve any Reallocation of Property over £1,500,000 in value

9.5 Subject to Rule 9.6 in the case of any Reallocation of Property other than for disposal which is held by the Council on a lease or license: -

(a) the CDSR may approve any Reallocation of Property where the annual rent or fee is £150,000 or less

(b) the Executive Member for Finance and Assets may approve any Reallocation of Property where the annual rent or fee is £250,000 or less

(c) the Executive may approve any Reallocation of Property, and must approve any Reallocation of Property where the annual rent or fee is over £250,000

For the purpose of this Rule, the annual rent or fee means the rent or fee payable by the Council at the time of the Reallocation (but ignoring any discount or rent-free period).

9.7 In the case of a Property held by the Council on lease where a premium has already been paid the approvals required shall be sought pursuant to Rule 9.5.

9.8 The value to be used to determine the appropriate approval arrangement for a proposed decision is the value, as estimated by an Officer of the Property Service or in a consultancy appointed to provide property advice or services, at the time that the report about the decision is prepared. It is accepted that the actual value of the Property or other action may differ from the estimated figure.

10.0 PROPERTY-RELATED COMPENSATION PAYMENTS

Financial provision

10.1 A Corporate Director must make financial provision for the payment of Property-related compensation for any project that may result in compensation becoming payable.

Negotiating and instructing

10.2 Only an Officer of the Property Service or in a consultancy appointed to provide Property advice can negotiate the terms for a proposed Property-related compensation payment.

10.3 Only an Officer of the Property Service can instruct a consultant to negotiate terms for a proposed Property-related compensation payment.

Approving terms

10.4 The CDSR can approve the terms of a property-related compensation payment (in the form of Heads of Terms).

Documenting the implementation of the decision

10.5 The ACE(LDS) must prepare and complete the documentation for compensation payments linked to Compulsory Purchase Orders and other activity that triggers statutory property-related compensation payments.

Making a payment

10.6 The ACE(LDS) must arrange the actual compensation payment.

11.0 SIGNATURE / SEALING OF PROPERTY CONTRACTS

11.1 No Property Contract shall be completed unless proper approval has been given in accordance with these Rules.

11.2 Subject to Rules 11.3 and 11.4, every Property Contract must be: -

(a) executed as a Deed by the ACE(LDS);

(b) signed by the ACE(LDS) (if the value is less than £50,000); or

11.3 The CDSR is authorised to sign Property Contracts comprising wayleaves, agricultural tenancy agreements or agricultural licences provided that:-

(a) the Property Contract is in a nationally recognised form or in a form prepared or approved by the ACE(LDS); and

(b) two signatories are required if the value is £50,000 or more.

11.4 All Directors are authorised to approve and sign Licences to or from third parties provided that:-

(a) the Licence is for a period not exceeding six months; and

(b) the Licence is for a fee not exceeding £15,000.

12.0 INVESTMENT IN PROPERTY

General

12.1 The CDSR is authorised, in accordance with the Council’s budgetary and policy framework, to implement all processes required in accordance with good practice to ensure that all property remains safe and fit for the purpose of service delivery, and complies with all relevant legislation, codes of practice and guidance.

12.2 For the avoidance of doubt this includes, but is not limited to: -

(a) responsive maintenance to a property

(b) preventative maintenance to a property

(d) works required to secure an empty property

(e) a response to compliance issues at a property

(f) improvement of a property (a project)

(g) addition of accommodation (a project)

(h) demolition of all or part of a building or structure.

Identifying Need

12.3 Officers in a directorate may identify a requirement for investment in a property from an operational perspective to either address a maintenance issue or meet a service requirement.

12.4 Only Officers in the Property Service are authorised to commission and instruct either contractors or consultants to undertake work in respect of the investment in property.

12.5 Officers in the Property Service may identify the possible requirement for investment in a property from an operational or strategic perspective.

12.6 The CDSR must approve the identification of the need for investment in property, in so doing taking account of the likely capital and revenue cost implications; and must confirm that such funds are available before any work is commissioned or undertaken by the Property Service.

Commissioning of Consultants and Contractors

12.7 Only Officers in the Property Service can commission and instruct and manage consultants to provide advice and other services associated with investment in property.

12.8 Only Officers in the Property Service, or consultants commissioned by the Property Service, can commission and manage contractors to undertake work in respect of investment in property.

Approvals

12.9 An approval related to financial or contractual matters must be given in accordance with the Financial Procedure Rules and / or the Procurement and Contract Procedure Rules and the terms of any contract or framework.

12.10 For the avoidance of doubt, where approvals are required under the Financial Procedure Rules and / or the Procurement and Contract Procedure Rules, and these Rules, then these approvals can be obtained contemporaneously.

12.11 Officers in the Property Service are responsible for ensuring that all necessary approvals have been obtained before the commencement of any work or project.