Ownership of the Maintained Areas (the land).
The question as to whether or not our company, The Spinney Hill (Oakham) Management Company Limited (SHMC), should own the Maintained Areas (MA) is one that can only be decided by the Membership at a General Meeting. The Membership, in order to make an informed decision, must be provided with all of the relevant information. That is what the following is intended to do.
It would seem to be logical for the SHMC to own the land it maintains. But it is more complicated than it appears. In acquiring a property, such as a house, it is standard practice to make extensive enquiries to identify exactly what you will are purchasing and, particularly, hidden problems. And, in the case of the MA, there are complicating factors.
There are three possible modes of ownership;
1. the developer (JW) retaining title,
2. the developer transferring ownership to a third-party,
and the most likely being,
3. the transfer of ownership to the SHMC, which is considered first.
The key documents involved are;
1. your Transfer Deed (TD),
2. the Sect 106 Agreement (S106), and
3. the Landscape Management Plan (LMP).
The LMP was a condition of the Planning Appeal of 24 August 2011. There were other conditions and specifications that may have relevance.
It is important to know that, whoever owns the land, the SHMC’s responsibilities for maintaining the Areas remain BUT are limited to the conditions specified in the TD (see ‘Maintenance Obligations’).
Transfer to the SHMC.
Presently Jeakins Weir (JW) owns the land, which remains private until it is transferred to a new owner. The S106, made between the District Council (RCC) and JW, contains conditions (covenants) that bind a new owner of the land (see extract below).
Most of the covenants will act in our interests but one allows the general public to enter on and use the Areas. This raises the concern that we will have no effective control over the Areas or a public that resorts to them.
The SHMC is responsible for maintaining the Areas, and we members must pay its bills. The degree and standard of maintenance that the SHMC is required to deliver is specified in your TD - which generally amounts to keeping the MA clean and tidy. Keep that in mind – that the SHMC has contracted with the Membership to provide only what is specified in the TD, and nothing more.
There are liabilities that are entailed in the ownership of land, and which are not specified in the TD. The most significant is that owner of land that is bounded by a watercourse is responsible for the maintenance of the watercourse. Presently JW owns the land and is therefore responsible for maintaining ‘our’ half of the Upper Branch Gwash (the stream on the north boundary) - and for the consequences of not maintaining it properly.
There are other possible problems such as erosion, possible subsidence, poor drainage, stability of the north bank, protection of dangerous places, and liabilities under the LMP.
The LMP is an agreement between the RCC and JW. It is a long and detailed document which directs how the Areas should be managed. It appears to be on a continuous rolling 5-year re-assessment. The liabilities in the Plan appear to be the responsibility of the land owner (it proposes that JW will retain ownership of the MA, and that it was intended for JW and RCC to administer the allotments).
A longer-term consideration might be Land Value Taxation (LVT). This proposed system would replace the current council tax, which is based on the value of the dwelling and garden, and would be based on just the value of the land itself. The question is, would the Maintained Areas be assessed for LVT?
It should be clear now that the Membership must have a clear understanding of the additional liabilities and risks we will have, before voting. A first step must be to identify all of the ‘pros and cons’. Then it would follow that the means to mitigate risks should be determined. Having assembled all relevant information, the Directors should seek comment from the Membership. Having done so, the Directors should negotiate terms of transfer with JW. Some possible demands we could make are suggested below. Once an agreement is reached the Directors should distributed it to the Membership before their recommendations are voted on at a GM.
Some proposed conditions to be negotiated.
A plan showing the exact boundaries of the Areas to be transferred, Sect 12 of the Title Deed notwithstanding.
That the area at the north-west corner, presently assigned as allotments, considered for transfer to the SHMC (not subject to S106)
**That JW & RCC agree to amend the covenant First Schedule, Transfer of Open Spaces, Sect. 1.9 (a) by amending the covenant: Restriction preventing use for any other purpose than [delete ‘public’, insert ‘communal’] open spaces
That all Areas are H&S compliant**.
That all trees have an extended viability, are free from disease, and do not require lopping or trimming.
That the fenced off area along the north boundary is free of debris, rubbish, and also anything obstructing or likely to obstruct water flow.
That the ground sloping toward the stream is structurally sound and free from potential erosion.
· Confirmation that all power, water, and drainage facilities have been or will be adopted by the relevant authorities.
· An explanation of what structures are referred to in 6.1 of Sect 2 in the Schedule.
If JW retains ownership (we decline to take ownership).
If JW retains ownership, the land remains private and S106 remains inoperative. On that basis all liabilities and costs entailed in the ownership of the land would remain with JW.
However, JW could use the land for its own purposes (say storage of materials and equipment), or may apply for planning permission for further development of the areas, or open the areas to public uses. Any of these possibilities would conflict with our company’s maintenance duties as specified in the TD and be open to discussion.
It might be assumed that the existing planning permissions for Spinney Hill would disallow further development by JW but the RCC have stated that they would consider any application for planning permission on its own merits. While it is clear there are no parts of the Areas suitable for further development, there is no guarantee that such an application would be refused (it is also unknown what development might take place in the allotment area).
It is presumed that contesting such matters would not be warranted by the membership. On that basis it is concluded that it would be advisable for the SHMC to accept ownership. However, that does not preclude negotiating the terms of transfer before we do so. It is doubted that JW would want the nuisance of administering a small plot of land and should be prepared to negotiate. We do have some leverage.
Transferral to a 3rd Party.
It seems unlikely that a 3rd Party would want to acquire the land because the S106 disallows commercial, investment, or development possibilities.
First Schedule, Transfer of Open Spaces.
Sect. 1.9. (Note: ‘land’ means the MA).
The following restrictive covenants will be included in the Transfer for the benefit of the Owners [sic] retained land.
Restriction preventing use for any other purpose than public open spaces
a. Not to be used for a trade or business
b. Not to be used for residential purposes
c. To keep land in good repair and condition
d. Not to obstruct public highway
e. To keep and properly maintain the boundaries in good repair and condition.
f. To properly keep and maintain any landscaping
g. To keep and maintain the land in a clean and tidy condition
h. Not to cause or permit any nuisance on the land
i. On any transfer of the land or any part thereof to procure that any transferee shall simultaneously enter into a direct covenant with the owner/ developer or the whole or relevant parts of the retained land to observe and perform these covenants
j. Not to erect any buildings or other erections except equipment ancillary to the purpose for which the land is transferred.