REPORT OF
THE STRATEGIC DIRECTOR ENVIRONMENT AND COMMUNITY SAFETY
TO THE DEPUTY CITY MAYOR FOR PROPERTY
ON 13TH AUGUST 2013 (FOR DECISION)
AND TO THE ASSISTANT MAYOR FOR HOUSING AND ENVIRONMENT
(FOR INFORMATION) ON 6TH AUGUST 2013
TITLE: Disposal of 39 Trenant Road
RECOMMENDATION:
That the Deputy City Mayor (Property) authorises:
· The disposal of 39 Trenant Road by way of tender sale on a conditional contracts basis
· That Urban Vision is instructed to undertake the disposal of 39 Trenant Road on a conditional contracts basis
The Strategic Director for Customer and Support Services to instruct the City Solicitor at Manchester City Council to complete the legal formalities.
EXECUTIVE SUMMARY:
This report to the Deputy Mayor seeks authority, subject to a general vesting declaration to dispose of the property in order to expediently secure its refurbishment and return to occupation as a residential dwelling.
39 Trenant Road is a two storey semi detached dwelling with three bedrooms situated within the Claremont ward.
The property was brought to the attention of the Housing Market Support Team in 2000 owing to its poor condition. At that time the property was occupied by its owner.
Numerous notices were served on the owner occupier to remedy statutory nuisance and in December 2008, following refusal of the occupier to allow access a warrant was obtained. The conditions found within the house were found to be extremely poor and an Emergency Prohibition Order was served on 19th December 2008 preventing the property from being occupied until the hazards were remedied.
Numerous attempts were made to support the owner to remedy the unsatisfactory housing conditions however these were unsuccessful and the council formed the view that there was no reasonable prospect of the property being returned to a habitable condition without legal intervention.
In 2008 the City Council made a Compulsory Purchase Order for 39 Trenant Road. The owner of the property objected to the Order and obtained legal aid. A Public Enquiry heard evidence from both sides in November 2011, July 2012 and November 2012. In January 2013 the Secretary of State confirmed the Order.
BACKGROUND DOCUMENTS: The Salford City Council (39 Trenant Road) (No2) Compulsory Purchase Order 2010
KEY DECISION: No
DETAILS:
1.0 Background
1.1 The Order Property was originally brought to the City Council in 2000 by neighbours who were concerned about its condition and the welfare of its occupant owner.
1.2 Between 2000 and December 2008 numerous enforcement notices were served and the City Council was forced to undertake work in default to remedy various defects. In addition offers of assistance were made to the owner by the City Councils Home Improvement Agency.
1.3 On 9th December 2008 following increasing concern over the structural condition a notice was served on the owner under the Environmental Protection Act, however entry was refused and a Magistrates warrant was subsequently obtained. Access under warrant was gained on 17th December and the hazards found were considered to constitute an imminent risk to the occupant and an Emergency Prohibition Order was served on 19th December 2008.
1.4 Extensive efforts were made by the City Council to support the owner to remedy the unsatisfactory conditions, including the offer of financial assistance. Several meetings were held with the owner and her representatives with no positive outcome
1.5 The property continued to decline and the City Council considered that the only legal recourse available was the making of a Compulsory Purchase Order and transfer to a suitable third party that would ensure it was returned to use as a family house.
1.6 The CPO was duly made by the City Council in 2010 and was subject to an objection from the owner which was lodged with the Secretary of State. A public enquiry was arranged for November 2011 at which the objectors solicitor requested an adjournment to allow time for legal aid funding to be sought and medical reports to be obtained. The City Council objected to the proposed adjournment at this late stage however it was accepted by the Planning Inspector and directions were issues to both parties by the Planning Inspector and the Public Enquiry was rescheduled for 9th July 2012. In particular the objectors sought a medical report on the owners mental health, which they said formed a key element of their objection.
1.7 An Urban Vision valuation of the property was undertaken as part of the CPO process and the property was valued at between £30,000 to £50,000. The cost of acquiring the property is estimated to be £32,250 to £53,750 inclusive of basic loss payment, less £4958:85 in local land charges.
1.8 On 9th July 2012 the objectors Solicitor failed to provide the agreed medical report that they had sought and the enquiry was part heard. Evidence was heard from some of the City Council officers. The enquiry was further adjourned to a two day hearing listed for November 2012. The enquiry was heard in November 2012 and the City Council was informed of the Secretary of State’s (SoS) decision to confirm the order in January 2013.
1.9 Further to the SoS decision the objector indicated to Legal Services that he intend to appeal the decision. Subsequent enquiries by Legal Services have established that the objector does not intend to appeal against the Secretary of State’s decision to confirm the CPO. Accordingly, the City Council is able to issue a General Vesting Declaration and take possession of the property
2.0 Disposal Options
An options appraisal has been undertaken by Urban Vision to determine the most appropriate means of disposing of the property and this is detailed below. The City Council seeks a disposal which minimises the financial risk to the City Council and returns the property into occupation in an expedient manner and provides a decent home.
Client’s Requirements / Private Treaty (1-1 transaction) / Tender (straight sale) / Tender (conditional exchange) / AuctionMaximises Capital Receipt / Likely but cannot be guaranteed due to lack of market exposure / ü / Likely but cannot be guaranteed as this method may prove prohibitive to certain sectors of the market. Receipt also received in two payments. This may be outweighed by the positive cash flow benefits. / ü
Wide exposure to the market. / ü / ü / ü
Enables Purchaser selection / ü / ü / ü
Quick disposal process. / ü
Marketing and disposal costs known from the outset. / ü
Transparent process. / ü / ü / ü
Reduced risk of abortive costs occurring. / ü
Retains element of control and provides enforceable contractual obligations to undertake refurbishment / Enforceability of obligationsis possible but potentially more limited. It may be challenging to achieve therequired outcomes. / Enforceability ofobligations is possible but potentially more limited. It may be challenging to achieve the required outcomes. / ü
Enables vetting of purchasers property management record / ü / ü / ü
Secures re-occupation / Occupational obligations will be difficult to enforce. The Council should rely on pre-disposal vetting to obtain as much comfort as possible on this requirement / Occupational obligations will be difficult to enforce. The Council should rely on pre-disposal vetting to obtain as much comfort as possible on this requirement / Occupational obligations will be difficult to enforce. The Council should rely on pre-disposal vetting to obtain as much comfort as possible on this requirement / Occupational obligations will be difficult to enforce. The Council should rely on pre-disposal vetting to obtain as much comfort as possible on this requirement
Other Factors / Greater potential for challenge / Council retains an element of risk between exchange and completion.
Having considered the foregoing potential disposal options in consultation with Urban Vision it has been agreed that a sale by tender on a conditional contracts basis is considered to be the most appropriate method of disposal in order to achieve the City Councils required outcomes.
3.0 Conclusion
I am satisfied that a sale by tender on a conditional contract is the most appropriate option to ensure the expedient return to occupation of 39 Trenant Road.
.
Subject to vesting, Urban Vision should be instructed to commence the tender process to secure the sale and refurbishment of 39 Trenant Road by tender on a conditional contract.
KEY COUNCIL POLICIES: Community Plan, Housing Strategy, Crime and Disorder reduction Partnership
EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS:- This report relates to the disposal of 39 Trenant Road, the CPO has already been confirmed and full consideration was given to the City Councils duties under the Equalities Act.
ASSESSMENT OF RISK: Low : the size and location of the property suggests it will be attractive to property investors. The market value of the property is low when compared to neighbouring properties owing to its extremely poor condition. Considerable local land charges have been made by the City Council as a result of non compliance with enforcement notices and these will be recovered when the property is sold. The making of the General Vesting Declaration is currently being undertaken to ensure that the establishment of the market value of the property for CPO purposes is closely linked to the timeline for marketing the property. This will help to ensure the sale price agreed and actual market value payable to the owner under the CPO rules are closely aligned and minimise any financial loss in the event of a depreciating housing market.
SOURCE OF FUNDING: The cost of the acquisition and disposal will be met from the Housing Market Support Capital Enforcement budget.
LEGAL IMPLICATIONS Supplied by Melinda Edwards, Solicitor Tel: 0161 219 6286
The Secretary of State has confirmed the Compulsory Purchase Order after a public inquiry and the objector has confirmed that they do not intend to challenge the Secretary of State’s decision.
Accordingly, the City Council is able to execute a General Vesting Declaration and take possession of the property.
Where a general vesting declaration is executed, title to the land vests in the acquiring authority on the vesting date which must be at least three months from confirmation of the compulsory purchase order.
It is important to ensure that the proposals for the property are consistent with the original purpose of making the compulsory purchase order as authorised by the enabling Act.
The Council must also attend to the matter of negotiating compensation once the general vesting declaration has been executed.
When exercising its functions, the Council must have due regard to the matters set out in section 149 of the Equality Act 2010.
FINANCIAL IMPLICATIONS Supplied by Simon Ashworth Ext: 0219
The sale of the property will generate a capital receipt for the City Council at the market value achieved at point of sale.
If the capital receipt achieved on the sale of the property does not cover the acquisition costs, then any short fall will be covered by the Housing Market Support Enforcement budget.
OTHER DIRECTORATES CONSULTED: none
CONTACT OFFICER: Rob Turner TEL. NO. 2922
WARD(S) TO WHICH REPORT RELATE(S): Claremont